LGIM launches Short-Term Alternative Finance Fund

Asset manager Legal & General Investment Management has launched a Short-Term Alternative Finance Fund as a part of its RAIF platform (a Luxembourg-domiciled umbrella fund platform).

The Luxembourg-based fund will invest in a portfolio of sub-1-year private credit assets, offering investors a strategic alternative to cash and other short-dated credit alternatives.

According to the asset manager, the strategy will target “attractive yields and low volatility, with an average investment grade rating”. Its primary focus is attracting institutional investors such as insurance companies, pension schemes, endowments, and family offices.

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The fund could invest in various short-term alternative finance options like capital call facilities, supply chain finance, trade receivables and asset-backed financing.

All transactions for the fund are underwritten by LGIM’s alternative debt investment team, led by Matthew Taylor, with Sam Jones acting as joint fund manager.

Matthew Taylor, head of alternative debt, LGIM, commented:
“We believe short-dated alternative finance can provide an attractive solution for enhanced returns in comparison to liquidity funds or holding cash. It achieves this with low duration and volatility helping investors to maintain sufficient liquidity with potentially reduced risk when compared to other alternatives.”

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Nick Bamber, head of private credit, LGIM, added: “We believe this asset class offers attractive yields, low risk and with a strong pipeline ahead. This makes short term alternative finance a potentially attractive, strategic cash alternative for investors.”

 

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