Archive for category: News & Insights

What is Private Debt?

Private debt, similar to public debt is an advance of money to a borrower with obligations to make interest payments on the amount borrowed (principal) and repay the principal at a predetermined maturity (typically 3-5 years). The term ‘private’ refers to these loans not being traded or issued in public markets albeit there is a limited secondary market for senior loans between private market participants. Private debt tends to be either Sub-Investment Grade loans or unrated by credit rating agencies. As with all debt transactions, the priority ranking is a key determinant of the level of risk and therefore yield. Debt offered ranges from senior secured to mezzanine finance with a key advantage of private debt solutions being a more tailored financing solution with more flexible financing structures (e.g. Payment in Kind (PIK) or preferred equity structures).

Market Overview

Private debt markets predominately comprise of three segments: commercial loans to businesses, consumer loans and residential mortgages. As of December 2020, the private debt market (excluding mortgages) was estimated to be US$848 billion in size. Within Australia, the largest segment is residential mortgages (62.5%) followed by commercial loans (32.7%). Historically loans have predominately been supplied by banks (>90%) while the remaining balance being provided by Non-Bank Financial Institutions (NBFIs). NBFIs are non-depositary financial institutions; meaning, unlike Authorised Deposit-taking Institutions, (ADIs), they do not hold deposits and are not beholden to the strict capital adequacy and lending standard regulations of Governments. Since the Global Financial Crisis (GFC), NBFIs have been gaining market share due to such regulations making it uneconomical in some cases for banks to participate in lending. Given the rise of NBFIs as an important source of capital, NBFIs have in turn developed investment products in order to finance their growing lending activities while also providing investors access to the asset class with more attractive yields than otherwise available in the public market.

Debt structures are varied and highly bespoke

Private debt consists of direct lending and syndicated financing solutions. Direct lending is where the investment manager acts as the sole lender. These transactions tend to be provided to small-mid sized businesses (i.e. US$10-75m EBITDA). Direct lending is highly selective and relationship driven given the close consultation between the lender, the management team and shareholders of the company. Direct lending typically involves a lengthy due diligence, are a highly tailored financing solution with the lender exhibiting a great deal of control over the structure, use of capital, covenants and terms. The lender also takes a more hands-on approach to monitoring the business, similar to that undertaken by direct private equity deals. Further, in the case of a default, the lender can take control of the business to greater ensure repayment.

In terms of syndicated financing, this offers groups of lenders the opportunity to lend to generally mid- to large-size businesses (i.e. US$75m+ EBITDA) for mergers, acquisitions and private equity buyouts, while allowing the lead financer to diversify their individual loan risk across a number of lenders. The terms of the loan structure are generally standardised and determined by the lead financer and therefore individual lenders have less control over the business and the loan structure more generally. Syndicated loans also allow for a single debt facility called Unitranche which combines varying levels of debt seniority and security. Syndicated loans are highly prevalent within the market and albeit the degree of information of the underlying company and covenant protection is far less onerous. In 2019, 87% of global leveraged loans were covenant-lite according to S&P Global market Intelligence, rising from 8% ten years earlier. As mentioned early, there is a limited but active secondary market for trading individual loan should liquidity be desired or to reduce exposure to an industry or company.

Why invest in Private Debt?

A conservatively managed, well diversified private debt strategy can offer investors a viable alternative to fixed income, particularly in a low interest rate environment. Private debt can offer a reliable income source with a low level of portfolio volatility and more broadly act as a diversify due to its lower correlation to public markets. The floating rate nature of the underlying loans also offer protection in a rising rate environment while being a lower risk investment compared to other alternative strategies including private equity.

What are the risks?

Private debt is generally illiquid, can offer limited transparency and is largely unregulated. The private debt market has experienced tremendous growth in recent years which has led to a build-up of substantial dry powder and in turn competition for deals which has driven down yields. Disciplined lending standards are integral component of navigating the landscape, particularly given the low-doc, covenant-lite loan terms prevalent within the market. Understanding the market segment and robustness of the security of income to service the debt is critical, alongside the leverage multiple and security of assets written against. Knowledge and relationships are critically important, further, the ability to ‘step in’ to restructure, refinance and in some cases ‘take the keys’ by converting debt into equity to protect capital is crucial for asset managers undertaking direct lending.

IMPORTANT NOTICE: This document is published by Lonsec Research Pty Ltd ABN 11 151 658 561, AFSL No. 421445 (Lonsec). Please read the following before making any investment decision about any financial product mentioned in this document.
Disclosure as at the date of publication: Lonsec receives fees from fund managers or product issuers for researching their financial product(s) using comprehensive and objective criteria. Lonsec receives subscriptions for providing research content to subscribers including fund managers and product issuers. Lonsec receives fees for providing investment consulting advice to clients, which includes model portfolios, approved product lists and other advice. Lonsec’s fees are not linked to the product rating outcome or the inclusion of products in model portfolios, or in approved product lists. Lonsec and its representatives, Authorised Representatives and their respective associates may have positions in the financial product(s) mentioned in this document, which may change during the life of this document, but Lonsec considers such holdings not to be sufficiently material to compromise any recommendation or advice.
Warnings: Past performance is not a reliable indicator of future performance. The information contained in this document is obtained from various sources deemed to be reliable. It is not guaranteed as accurate or complete and should not be relied upon as such. Opinions expressed are subject to change. This document is but one tool to help make investment decisions. The changing character of markets requires constant analysis and may result in changes. Any express or implied rating or advice presented in this document is limited to “General Advice” (as defined in the Corporations Act 2001 (Cth)) and based solely on consideration of the investment merits of the financial product(s) alone, without taking into account the investment objectives, financial situation and particular needs (‘financial circumstances’) of any particular person. It does not constitute a recommendation to purchase, redeem or sell the relevant financial product(s).
Before making an investment decision based on the rating(s) or advice, the reader must consider whether it is personally appropriate in light of his or her financial circumstances, or should seek independent financial advice on its appropriateness. If our advice relates to the acquisition or possible acquisition of particular financial product(s), the reader should obtain and consider the Investment Statement or Product Disclosure Statement for each financial product before making any decision about whether to acquire a financial product. Where Lonsec’s research process relies upon the participation of the fund manager(s) or product issuer(s) and they are no longer an active participant in Lonsec’s research process, Lonsec reserves the right to withdraw the document at any time and discontinue future coverage of the financial product(s).
Disclaimer: This document is for the exclusive use of the person to whom it is provided by Lonsec and must not be used or relied upon by any other person. No representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented in this document, which is drawn from public information not verified by Lonsec. Financial conclusions, ratings and advice are reasonably held at the time of completion but subject to change without notice. Lonsec assumes no obligation to update this document following publication. Except for any liability which cannot be excluded, Lonsec, its directors, officers, employees and agents disclaim all liability for any error or inaccuracy in, misstatement or omission from, this document or any loss or damage suffered by the reader or any other person as a consequence of relying upon it.
Copyright © 2021 Lonsec Research Pty Ltd (ABN 11 151 658 561, AFSL No. 421445) (Lonsec). This document is subject to copyright of Lonsec. Except for the temporary copy held in a computer’s cache and a single permanent copy for your personal reference or other than as permitted under the Copyright Act 1968 (Cth), no part of this document may, in any form or by any means (electronic, mechanical, micro-copying, photocopying, recording or otherwise), be reproduced, stored or transmitted without the prior written permission of Lonsec.
This document may also contain third party supplied material that is subject to copyright. Any such material is the intellectual property of that third party or its content providers. The same restrictions applying above to Lonsec copyrighted material, applies to such third party content.

Secondary investments refer to the buying and selling of an investors interest and unfunded commitments in pre-existing private equity funds. Given the absence of an established trading market, the transfer of interests in private-equity funds can be a complex, time consuming and a labour-intensive process of negotiation. The volume of secondary market transactions has been climbing over the years, largely in-step with the growth of private assets generally. That said, the market can be cyclical, reflecting not only exit conditions but also the need for liquidity from investors which in turn dictates the price or discount paid for such interests.

A ‘traditional’ secondary transaction includes the transfer of investments and unfunded commitments from one Limited Partnership (LP) to another. The sale typically requires the consent of the General Partner (GP). There are several other secondary transactions such as ‘tail-end’, ‘structured joint venture’, ‘structured secondary’ to name a few but the common link between them all is they are predominately driven by the LP. As depicted in the graph above, these ‘traditional’ secondary market transactions have made up an overwhelming majority of aggregate secondary market transactions historically. In recent years however, the emergence of GP-led secondary transactions has become increasingly common, so much so that in 2020 they accounted for approximately 50% of all secondary transaction volume with the trajectory expected to continue for 2021.

What is a GP-led secondary transaction?

A GP-led transaction is when the GP initiates the transaction, generally in the desire to restructure the fund with the key objectives being to either extend the fund’s life, raise additional capital and/or return cash to existing investors. These can take numerous forms with the most common being a ‘continuation vehicle’ whereby the GP of an ageing fund believes it needs more time to maximise the value of its assets than the fund’s remaining term allows. The GP therefore establishes a new continuation vehicle to transfer residual assets. Existing LPs are then given the option of rolling their interests into the new fund or liquidating. The liquidation is typically financed by raising additional capital from new investors or ‘rolling’ of existing investors. Other GP-led transactions may involve preferred equity, priority distribution rights and transfer of follow-on capital commitments.

GP-led single asset secondaries have been of particular prevalence of late. These are similar to a ‘continuation’ vehicle albeit the new vehicle will only contain one asset and therefore closely resembles a co-investment. In these cases, GP’s don’t wish to be a forced seller of what is deemed a ‘trophy’ asset due to an ageing fund and/or desire for investor liquidity. The GP is of the view there is considerable value to be gained by holding and in some cases re-investing in the business for a longer duration to see the value creation plan come to greater fruition.

What has led to this sudden growth in GP-led secondaries?

Traditionally a GP’s exit path has been one of either a trade sale to another private equity sponsor, a strategic sale such as a merger or acquisition to another business or a public market IPO. The GP-led transaction has opened up a fourth avenue for an ‘exit’ of sorts.

Several factors are potentially at play but market conditions are likely to be a key driver of this trend. Industry dry powder continues to surge to all-time highs, with an estimated US$1.9 trillion globally yet to be deployed. Dry powder has built over the years from both strong fund-raising activities from growing investor interest and GP’s slowing deal activity due to becoming increasingly selective of the quality of businesses purchased alongside the market multiple being paid. This dynamic was exacerbated by a slowdown of deal activity throughout 2020 as exit conditions were less favourable and therefore GP’s were more inclined to hold onto assets they were familiar with. Other contributing factors that may be driving this trend is the notion of GP-led secondaries can provide the opportunity for a GP to reset fees and crystallise carried interest albeit an additional injection of capital or rolling of carried interest into the new vehicle is common.

Buyer beware

Historically, GP-led secondaries were often referred to as ‘orphaned’ or ‘zombie’ funds as they tended to have a few remaining assets that were either hard to sell at desired valuations or troubled assets that required time, investment and restructuring which were transferred into a new vehicle whereby creating a liquidity event for existing LPs and reset of expectations. While these certainly still exist, especially following a pandemic, the quality of the businesses within the Funds and the rationale for conducting transactions has largely evolved. Nonetheless, it is critical to conduct thorough due diligence of each transaction, specifically the quality and experience of the GP, motivation for the transaction, the potential conflicts that may exist, the alignment of the GP within the new fund, the valuation being paid by new LPs, the terms of the new fund (i.e. fees, preferred equity, unfunded commitments, use of capital etc.). As always, private market transactions are very much a relationship game and those with strong relationships tend to be notified first and given priority access to the higher quality, more attractive deal flow.

IMPORTANT NOTICE: This document is published by Lonsec Research Pty Ltd ABN 11 151 658 561, AFSL No. 421445 (Lonsec). Please read the following before making any investment decision about any financial product mentioned in this document.
Disclosure as at the date of publication: Lonsec receives fees from fund managers or product issuers for researching their financial product(s) using comprehensive and objective criteria. Lonsec receives subscriptions for providing research content to subscribers including fund managers and product issuers. Lonsec receives fees for providing investment consulting advice to clients, which includes model portfolios, approved product lists and other advice. Lonsec’s fees are not linked to the product rating outcome or the inclusion of products in model portfolios, or in approved product lists. Lonsec and its representatives, Authorised Representatives and their respective associates may have positions in the financial product(s) mentioned in this document, which may change during the life of this document, but Lonsec considers such holdings not to be sufficiently material to compromise any recommendation or advice.
Warnings: Past performance is not a reliable indicator of future performance. The information contained in this document is obtained from various sources deemed to be reliable. It is not guaranteed as accurate or complete and should not be relied upon as such. Opinions expressed are subject to change. This document is but one tool to help make investment decisions. The changing character of markets requires constant analysis and may result in changes. Any express or implied rating or advice presented in this document is limited to “General Advice” (as defined in the Corporations Act 2001 (Cth)) and based solely on consideration of the investment merits of the financial product(s) alone, without taking into account the investment objectives, financial situation and particular needs (‘financial circumstances’) of any particular person. It does not constitute a recommendation to purchase, redeem or sell the relevant financial product(s).
Before making an investment decision based on the rating(s) or advice, the reader must consider whether it is personally appropriate in light of his or her financial circumstances, or should seek independent financial advice on its appropriateness. If our advice relates to the acquisition or possible acquisition of particular financial product(s), the reader should obtain and consider the Investment Statement or Product Disclosure Statement for each financial product before making any decision about whether to acquire a financial product. Where Lonsec’s research process relies upon the participation of the fund manager(s) or product issuer(s) and they are no longer an active participant in Lonsec’s research process, Lonsec reserves the right to withdraw the document at any time and discontinue future coverage of the financial product(s).
Disclaimer: This document is for the exclusive use of the person to whom it is provided by Lonsec and must not be used or relied upon by any other person. No representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented in this document, which is drawn from public information not verified by Lonsec. Financial conclusions, ratings and advice are reasonably held at the time of completion but subject to change without notice. Lonsec assumes no obligation to update this document following publication. Except for any liability which cannot be excluded, Lonsec, its directors, officers, employees and agents disclaim all liability for any error or inaccuracy in, misstatement or omission from, this document or any loss or damage suffered by the reader or any other person as a consequence of relying upon it.
Copyright © 2021 Lonsec Research Pty Ltd (ABN 11 151 658 561, AFSL No. 421445) (Lonsec). This document is subject to copyright of Lonsec. Except for the temporary copy held in a computer’s cache and a single permanent copy for your personal reference or other than as permitted under the Copyright Act 1968 (Cth), no part of this document may, in any form or by any means (electronic, mechanical, micro-copying, photocopying, recording or otherwise), be reproduced, stored or transmitted without the prior written permission of Lonsec.
This document may also contain third party supplied material that is subject to copyright. Any such material is the intellectual property of that third party or its content providers. The same restrictions applying above to Lonsec copyrighted material, applies to such third party content.

Lonsec and SuperRatings are pleased to announce the nominations for this year’s Lonsec and SuperRatings Fund of the Year Awards. With 18 categories, the awards emphasise Lonsec and SuperRatings’ commitment to recognising the best providers across the managed fund and superannuation sectors.

Lonsec CEO, Mike Wright, comments, ‘As the pandemic has posed ongoing challenges across investment markets and operating environments, it is important that we recognise the contributions of strong funds that are helping their clients and members navigate this uncertainty.’

For the first time, Lonsec will present a full suite of nine managed fund awards, including an overall Lonsec Manager of the Year. Lorraine Robinson, Executive Director of Lonsec Research explains, ‘In previous years, the SuperRatings Awards have been a much-anticipated event and we decided it’s time that Lonsec Research further recognised the outstanding contributors to the managed fund market.’

This year’s awards will be the nineteenth for SuperRatings, recognising the best superannuation funds. Kirby Rappell, Executive Director of SuperRatings comments, ‘It is an honour to continue to recognise the best in the superannuation sector and award those funds who, in the last year, have helped their members to navigate a very difficult time. While this year’s event will be held virtually, the awards continue to be very real.’

An overall SuperRatings Fund of the Year winner will also be announced on the day. The full list of nominees for all categories is available at the bottom of this release.

The awards will be held at 3.00pm on Thursday, 28 October in a 1.5-hour online session to be enjoyed from the comfort of your home or office. As part of the awards program, Lonsec and SuperRatings will host a panel session, On the Road to Net Zero by 2050, to discuss the strategic considerations associated with the rising adoption of net zero by 2050 by companies and governments and what this means for investment portfolios.

The nominations for the Lonsec awards are:

Lonsec Manager of the Year

Finalists

First Sentier Investors
Franklin Templeton
Pendal Group

Lonsec Multi-Asset Fund of the Year

Finalists

Atrium Evolution Series – Diversified Fund AEF 9
BlackRock Tactical Growth Fund
PineBridge Global Dynamic Asset Allocation Fund

Lonsec Active Equity Fund of the Year

Finalists

GQG Partners Emerging Markets Equity Fund – A Class
Hyperion Australian Growth Companies Fund
T. Rowe Price Global Equity Fund

Lonsec Passive Fund of the Year

Finalists

BetaShares Asia Technology Tigers ETF – ASX: ASIA
ETFS Physical Gold – ASX: GOLD
VanEck MSCI International Quality ETF – ASX: QUAL

Lonsec Active Fixed Income Fund of the Year

Finalists

Ardea Real Outcome Fund
Macquarie Income Opportunities Fund
Pendal Short Term Income Securities Fund

Lonsec Property and Infrastructure Fund of the Year

Finalists

Australian Unity Healthcare Property Trust
ClearBridge RARE Infrastructure Income Fund (Hedged)
Quay Global Real Estate Fund

Lonsec Alternatives Fund of the Year

Finalists

Hamilton Lane Global Private Assets Fund (AUD)
Man AHL Alpha
Partners Group Global Value Fund

Lonsec Emerging Manager of the Year

Finalists

Daintree Capital Management
Eiger Capital
Sage Capital

Lonsec Innovation Award

Finalists

iShares Core Corporate Bond ETF (ASX: ICOR)
Magellan FuturePay
Robeco SDG Credit Income Fund (AUD Hedged) – Class B

 

 

SuperRatings Fund of the Year Award

Announced on the day.

 

 

 

 

 

SuperRatings MySuper of the Year 

Awarded to the fund that has provided the Best Value for Money default offering.

Finalists
AustralianSuper
Aware Super
CareSuper
Cbus
Equip
HESTA
Hostplus
QSuper
Sunsuper
UniSuper

SuperRatings MyChoice Super of the Year

Awarded to the fund with the Best Value for Money Offering for engaged members.

Finalists
AustralianSuper
Aware Super
CareSuper
Equip
Hostplus
Mercer Super Trust
QSuper
Sunsuper
UniSuper
Vision Super

SuperRatings Pension of the Year

Awarded to the fund with the Best Value for Money pension offering.

Finalists
AustralianSuper
Aware Super
Cbus Super
HESTA
Hostplus
QSuper
Spirit Super
Sunsuper
TelstraSuper
UniSuper

SuperRatings Career Fund of the Year 

Awarded to the fund with the offering that is best tailored to its industry sector.

Finalists
Cbus Super
HESTA
Hostplus
Mercy Super
TelstraSuper
UniSuper

SuperRatings Momentum Award

Awarded to the fund that has demonstrated significant progress in executing key projects that will enhance its strategic positioning in coming years.

Finalists
Active Super
Cbus Super
CSC
Equip
Hostplus
TelstraSuper

SuperRatings Net Benefit Award

Awarded to the fund with the best Net Benefit outcomes delivered to members over the short and long term.

Finalists
AustralianSuper
CareSuper
Cbus Super
HESTA
Hostplus
UniSuper

SuperRatings Smooth Ride Award

Awarded to the fund that has best weathered the ups and downs of the market, while also delivering strong outcomes.

Finalists
Aware Super
BUSSQ
CareSuper
Cbus Super
HESTA
QSuper

SuperRatings Infinity Award

Awarded to the fund most committed to addressing its environmental and ethical responsibilities.

Finalists
Active Super
Australian Ethical Super
Aware Super
Christian Super
Future Super
HESTA

Release ends
For more information, contact:
Rob Hardy
Robert.Hardy@lonsec.com.au
1300 826 395

The assessment of performance of superannuation funds has gained traction over the past month, with the release of the government’s first superannuation performance test findings. When deciding to switch funds, it is easy to be swayed by investment returns, but there are other considerations that are as important. SuperRatings CEO Kirby Rappell says ‘Superannuation is bigger than just returns. It’s a good idea to consider a variety of factors such as fees, investment choices and insurance when deciding whether a fund is right for you.’

SuperRatings suggests you consider fees and returns in tandem as focussing solely on fees may mean that you miss out on higher account balances if a fund invests in more costly assets to generate greater returns. You should also look at total fees, which include both administration and investment fees to make sure you are comparing like with like.

Another key thing to consider when comparing super funds is investment choice. Mr Rappell says ‘make sure the funds you’re considering have investment options that suit you. This can range from ensuring the fund has an investment option that suits the level of risk you’re comfortable with to checking if there are specialist investment options such as a socially responsible option.’

One of benefits of super for many is the insurance available via a fund. As with any insurance product, it is important to work out what you want covered, the level of cover you need and if that cover is available in your comparison funds. Fees and returns, investment choice and insurance coverage all should be considered when deciding to move super fund. We suggest using the tools and calculators offered by funds to see what meets your needs and the impact switching funds could have – particularly on your insurance cover.

To ensure you have access to sufficient information to drive the best retirement outcomes, we suggest contacting your superannuation fund to find out what advice services are available to you. If wish to find a financial adviser, the Government provides information on how to select a financial adviser through the MoneySmart website.

Looking at returns, SuperRatings has seen balances continue to grow in August. The typical balanced option returned an estimated 1.6% over the month and 18.2% over the year.  The typical growth option returned an estimated 1.9% for the month and the median capital stable option also increased 0.7% in the month.

Accumulation returns to August 2021

	Monthly	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SR50 Balanced (60-76) Index	1.6%	18.2%	8.0%	8.6%	8.1%	9.0%
SR50 Capital Stable (20-40) Index	0.7%	7.8%	4.6%	4.6%	4.8%	5.5%
SR50 Growth (77-90) Index	1.9%	22.1%	9.3%	9.9%	9.1%	10.1%

Source: SuperRatings estimates

Pension returns were also positive in August. The median balanced pension option returned an estimated 1.7% over the month and 19.7% over the year. The median pension growth option returned an estimated 2.0% and the median capital stable option also increased an estimated 0.7% in the month.

Pension returns to August 2021

	Monthly	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SRP50 Balanced (60-76) Index	1.7%	19.7%	8.6%	9.3%	8.7%	9.9%
SRP50 Capital Stable (20-40) Index	0.7%	8.5%	5.1%	5.3%	5.2%	6.1%
SRP50 Growth (77-90) Index	2.0%	23.9%	10.0%	10.8%	9.9%	11.3%

Source: SuperRatings estimates

Release ends

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Warnings: Past performance is not a reliable indicator of future performance. Any express or implied rating or advice presented in this document is limited to “General Advice” (as defined in the Corporations Act 2001(Cth)) and based solely on consideration of the merits of the superannuation or pension financial product(s) alone, without taking into account the objectives, financial situation or particular needs (‘financial circumstances’) of any particular person. Before making an investment decision based on the rating(s) or advice, the reader must consider whether it is personally appropriate in light of his or her financial circumstances, or should seek independent financial advice on its appropriateness. If SuperRatings advice relates to the acquisition or possible acquisition of particular financial product(s), the reader should obtain and consider the Product Disclosure Statement for each superannuation or pension financial product before making any decision about whether to acquire a financial product. SuperRatings research process relies upon the participation of the superannuation fund or product issuer(s). Should the superannuation fund or product issuer(s) no longer be an active participant in SuperRatings research process, SuperRatings reserves the right to withdraw the rating and document at any time and discontinue future coverage of the superannuation and pension financial product(s).

Copyright © 2021 SuperRatings Pty Ltd (ABN 95 100 192 283 AFSL No. 311880 (SuperRatings)). This media release is subject to the copyright of SuperRatings. Except for the temporary copy held in a computer’s cache and a single permanent copy for your personal reference or other than as permitted under the Copyright Act 1968 (Cth.), no part of this media release may, in any form or by any means (electronic, mechanical, micro-copying, photocopying, recording or otherwise), be reproduced, stored or transmitted without the prior written permission of SuperRatings. This media release may also contain third party supplied material that is subject to copyright. Any such material is the intellectual property of that third party or its content providers. The same restrictions applying above to SuperRatings copyrighted material, applies to such third party content.