KiWi Private Credit Fund Response to COVID-19 Situation

March 24, 2020 – As portfolio manager of KiWi Private Credit Fund, Kilgour Williams Capital wants to update current and prospective investors about how we are responding to the COVID-19 pandemic and the actions we have taken in the fund.

Precautions taken at Kilgour Williams Capital

First, the Kilgour Williams team has moved to a remote working environment where all staff remain healthy and are working from home with full functionality. We continue to have seamless connectivity with all of our portfolio management and communication tools, our lending partners, banks, custodian, back up servicer, fund administrators and investors. We have also been in touch with all of these key service providers and they remain fully operational with regard to business continuity. In short, while we are physically isolated, it remains business as usual from an operational perspective.

Precautions taken in KiWi Private Credit Fund

With regard to the fund, we have seen the COVID-19 situation developing for a couple of months now with rapid acceleration of activity over the last 10 days. We took a number of actions over the last several months and continue to make prudent adjustments to protect investors as the situation evolves.

Over the last two months we have done the following:

• Focused new loan purchases on higher quality credits

• Increased to portion of secured loans (real estate first mortgages)

• When making business loans, avoided loans where supply chains were at risk due to COVID-19

As the pandemic accelerated over the last 10 days, we have taken additional action:

• We ceased buying new loans

• We plan to eliminate all leverage in the fund in 30 to 45 days. Leverage is currently ~15% of total assets.

Anticipated Actions Going Forward

Once the fund is completely de-levered, in about a month, we will re-examine the credit environment at the time and make decisions regarding the resumption of new loan investment. Our current expectation is that we will resume buying loans – but in the ’new world’ environment. Specifically, we will review how our marketplace lending partners have adjusted their underwriting and pricing and we will overlay our own augmented screens and higher yield-per-risk requirements.

While these actions remain subject to change as conditions evolve, we know from being active in the credit space prior to and throughout the global financial crisis that credit markets are quick to react to changing conditions and that those who can provide liquidity to a portion of the market can achieve attractive risk-adjusted yields.

Final Thoughts

In sum, like everyone we are concerned about the impacts of COVID-19 on the North American economy. We intend to be very cautious as the situation unfolds. That said, we take comfort that the key aspects of our portfolio management approach will serve us well in these uncertain times, specifically:

• Our restriction to only invest in prime rated borrowers;

• Our massive portfolio diversification across asset classes, lending platforms, geographies and industries;

• The vast majority of the assets are denominated in USD, so Canadian domiciled investors will benefit from higher currency-adjusted returns;

• The short duration of the assets in our portfolio; and,

• The modest and declining level of leverage in the fund.

We will update you regularly as the situation develops, but we are also available to discuss these matters at any time.