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ARBOUR GLOSSARY

This glossary of terms contains definitions of terminology used in Arbour platform.

N

B

D

Q

F

S

T

H

U

V

J

W

K

X

Y

Z

A

Asset manager

 

C

Close fund

A fund that is closed to investors, either temporarily or permanently.

Covenant

Promises made by the borrower to the lender, such as requirements that the borrower meets specific financial conditions.

Credit risk

The risk of a loss arising from the failure of a counterparty to honour its contractual obligations. This involves both default risk and downgrade risk.

 

E

Exposure at default

The exposure at default, also known as credit exposure, is the total value the firm is exposed to when a loan defaults.

EBITDA

Earnings before interest, taxes, depreciation, and amortization.

 

G

General partner

The member of a fund partnership with fiduciary responsibility for the investment management of the fund on behalf of its limited partners (LPs).

 

I

Institutional investor

Investment philosophy

Set of belief, principles and assumptions that guide the investor decision making process (e.g. factor investing, value investing, fundamentals etc.).

L

Loss given default

The loss given default is the proportion of the exposure that is actually lost in the event of default, or its inverse, the recovery. This quantity is never known in advance and only when the whole recovery process is over.

Limited partner

An investor in a fund partnership who is not responsible for the management of the fund.

Loan to value

Financial term used by lenders to express the ratio of a loan to the purchasing price of the asset.

 
 

M

Market risk

Risk of loss in a financial position due to changes in the underlying market instruments.

 

O

Operational risk

Risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events (e.g. fraud, fat-finger trades, earthquakes). Includes legal risk, but excludes strategic and reputational risk.

 

P

Payment-in-Kind

Financial instrument that pays interest or dividends to investors with additional securities or equity instead of cash.

Probability of default

The probability of default is the likelihood that the obligor defaults by the time horizon.

 
 

R

Revolving credit facility

It is a form of credit issued by a financial institution that provides the borrower with the ability to draw down or withdraw, repay, and withdraw again. A revolving loan is considered a flexible financing tool due to its repayment and re-borrowing accommodations.