Jamaica Observer
Codie-ann Barrett | Business Reporter
Sygnus attracts new capital following Hurricane Melissa
Jason Morris, co-founder, EVP and chief investment officer at Sygnus Credit Investments.
INVESTORS are knocking on the doors of Sygnus Credit Investments (SCI) as companies seek capital for Jamaica’s reconstruction, even as the firm accelerates its push to expand private-credit opportunities across Puerto Rico.
Prior lending partners have already reached out, offering additional funding, positioning SCI to take advantage of new opportunities emerging during the recovery phase. About 12.7 per cent of SCI’s investment portfolio was negatively affected by Hurricane Melissa, but 77 per cent of those impacted are sponsored portfolio companies, giving them a stronger chance of recovering quickly with financial support. SCI is also in early discussions with additional financiers who, spurred by the effects of Melissa, are now looking to channel capital into Jamaican businesses and entrepreneurs.
“We are exploring a facility with an international financial institution; hopefully, it comes through so that we can dedicate it to the rebuilding efforts,” revealed Jason Morris, co-founder, EVP and chief investment officer at Sygnus Credit Investments, during its recent Q1 earnings call on Thursday.
In contrast, 4.4 per cent of SCI’s portfolio was positively impacted, as several companies are now seeing increased demand for their services in the post-hurricane rebuilding effort.
“Many of these have already reached out to us to expand their working capital to bring in new inventory and monetise these opportunities,” said Morris.
The Group ended the quarter with US$20.7 million in readily deployable liquidity, providing a solid cushion against macroeconomic uncertainty in the aftermath of the Category 5 hurricane. SCI says this level of liquidity gives the company the flexibility to deploy capital strategically as it supports the recovery of the Jamaican economy. Sygnus Credit Investments had a record-breaking quarter in terms of revenue, earning more than US$4 million in total investment income and net investment income, but their net profit dropped by 35.5%, falling from about US$4.93 million last year to US$3.18 million this year.
“This result was primarily impacted by two items: an increase in impairment allowance on financial assets during the period and unrealised fair value losses, which were a gain in the corresponding period last year that was later reversed in the financial year due to fluctuations in valuations.” Its quarterly report stated.
Alongside its local developments, SCI is looking to Puerto Rico to help offset any near-term effects from its Jamaican portfolio, which was impacted by the hurricane. Currently, 37.5 per cent of SCI’s portfolio is based in Puerto Rico, compared to 26.2 per cent in Jamaica. SCI is scaling its private-credit business in the territory through its 95.58 per cent-owned subsidiary, Acrecent Financial LLC (AFL), with a new target to expand SCI’s overall private-credit portfolio to US$500 million within the next few years.
“In three years, we want to get to US$500 million in terms of private credit portfolio,” he announced.
That business currently operates with a US$100-million credit line, and, according to Morris, SCI plans to begin with an initial US$50-million increase before doubling the facility over the next 18 months. To support this expansion, SCI is aiming to raise capital through additional investments and from investors in Puerto Rico or adjacent markets such as the United States. The private-credit platform is currently not configured for institutional equity investment, and SCI is now restructuring its organisational framework to allow institutions to invest directly as equity holders, enabling the company to use that capital to expand its credit lines and scale the business. That process has already begun. SCI expects to receive its first dividend from the Puerto Rico Credit Fund in the second quarter ending December 2025. An international financing partner has already committed US$10 million, and once finalised, SCI will update the public. Morris noted that this commitment represents one of the pathways through which the company intends to grow its private-credit portfolio to the US$500 million target. AFL also delivered record results this quarter for total investment income and net investment income of US$2.52 million, which increased 18.2 per cent. AFL’s cumulative earnings power has exceeded the US$10.00-million mark, setting a new milestone since completing its reorganisation on July 1, 2023. AFL’s cumulative earnings were US$10.33 million, exceeding the entirety of its previous two decades of operations.
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