Gryphon’s $75M Placement Raises Questions on Portfolio Impact and Distribution Outlook

Capital Raise Completed

Gryphon Capital Income Trust (ASX, GCI) has announced the successful completion of a $75 million wholesale placement, issuing 37.5 million new ordinary units at $2.00 each to wholesale investors. This capital raise was conducted under the Trust’s existing placement capacity, meaning no unitholder approval was required, and the new units will rank equally with existing units, including distribution entitlements.

Strategic Use of Proceeds

The funds raised are earmarked to support incremental portfolio management consistent with the Trust’s stated investment strategy. While details remain broad, this suggests Gryphon Capital aims to leverage the additional capital to enhance its fixed income portfolio, potentially increasing asset diversity or scale. The move aligns with Gryphon’s position as a specialist fixed income manager with over A$4.8 billion in assets under management, now operating under the global Barings umbrella.

Unit Purchase Plan to Follow

In addition to the wholesale placement, the Responsible Entity has announced plans to offer a Unit Purchase Plan (UPP) to existing unitholders. This will allow eligible investors to acquire up to $30,000 worth of additional units, providing a fair opportunity to increase their holdings on equitable terms. Details and timing of the UPP are expected to be released shortly, which could further broaden the Trust’s capital base and deepen investor engagement.

Backing and Management

Gryphon Capital Investments, the Trust’s investment manager, benefits from being part of Barings LLC, a global investment manager with over US$456 billion in assets under management. This relationship provides Gryphon with enhanced scale and resources to execute its fixed income strategies effectively. The placement was arranged by Morgans Financial Limited, acting as sole lead manager and settlement agent.

Market Implications

The placement and forthcoming UPP indicate Gryphon Capital Income Trust’s confidence in its growth prospects and the underlying fixed income market environment. For investors, the new units offer a chance to participate in the Trust’s expansion, though the impact on distributions and portfolio composition will be closely watched as the capital is deployed.