Aberdeen Standard Investments Raises £350m from UK Pension Funds at First Close on a Secured Credit Fund
Aberdeen Standard Investments, the global asset manager, has completed its first round of capital raising for a closed-ended secured credit fund. The objective of the Secure Income & Cash Flow strategy is to deliver a reliable stream of cash flows by investing in a diversified portfolio of infrastructure debt, commercial real estate debt, private placement bonds and other areas of private credit.
The first close represented £350m in commitments, approximately half of the target final fund size of £600m-£800m, with capital from a number of large UK corporate pension schemes. The investors were attracted by the potential for better yields relative to public corporate bonds as well as the improved risk profile of investment grade private credit, due to asset security and typically robust covenants.
Barry Fricke, Private Credit Investment Director, Aberdeen Standard Investments, commented: “Secure income strategies can be an attractive way for pension schemes to meet their growing annual cash flow needs while capturing illiquidity premia. By investing in a diverse range of private credit assets in a single fund, investors are able to access relatively uncorrelated areas of the economy in an integrated way. This should allow a more selective approach to deploying capital, and result in a portfolio that is less sensitive to overall GDP growth and general market volatility.”
The fund draws on the combined strengths of the Aberdeen Standard Investments Credit team, which manages over £100bn of assets, and the Private Markets team, representing over £55bn of assets. The innovative strategy is one of a number of private markets solutions being developed by the firm that feature collaboration among various different investment capabilities.
Craig MacDonald, Global Head of Credit, Aberdeen Standard Investments, said: “We expect the market for investment grade private credit to continue to grow in size and sophistication. Regulators increasingly recognise the benefits to the financial system of having various types of lenders, whilst awareness and confidence in non-bank opportunities is growing amongst borrowers and investors. We expect various areas of private credit to play a more prominent role within institutional investors’ portfolios over the coming years, although we recommend a discerning and disciplined approach to investing in the asset class.”
Source: Aberdeen Standard Investments press release