Industriens Pension is ready with a new credit investment of over DKK 2.2 billion to medium-sized European companies that need capital to grow. The investment is being made through a new credit fund from Goldman Sachs Asset Management.
The new credit fund, ‘West Street Direct Lending European Evergreen Partners’, focuses primarily on lending to robust private equity-owned companies with significant growth potential. By far the largest amounts will be lent to European companies, and in addition, the credit fund will also lend to a smaller extent to Australian companies.
Capital for growth in European business
In the first round, the new fund has achieved a total volume of 12.7 billion DKK (1.7 billion euros) through commitments from a number of different institutional investors. The fund will open up to new investors and additional capital on a large scale to mainly European companies within an expected 12–18 months.
“It is an attractive investment for us, as we primarily expect a solid return with a relatively low risk. At the same time, we like the fund’s focus on solid and steadily growing European companies that are looking for capital to develop further. This type of lending makes a welcome contribution to further development in European business,” says Anders Ellegaard, Head of Bond and Credit Investments at Industriens Pension.
Strongly growing asset class in Industriens Pension
Over a number of years, Industriens Pension has increased its investments in unlisted credit via funds, and the asset class now amounts to DKK 18.4 billion. At the start of 2020, the company’s investments in unlisted credit were, by comparison, just DKK 6.1 billion, and Industriens Pension expects to continue to increase its investments in the area in the coming years.
It is an asset class that has delivered solid returns over a number of years and also has built-in inflation protection. In addition, the asset class has helped to spread the overall investment risk, as credit investments are distributed across different types of credit assets instead of just listed corporate bonds.
Goldman Sachs itself has a share of all the fund’s loans on its balance sheet, and the asset manager’s employee fund has also invested a significant amount in the fund.
Industriens Pension’s new investment commitment of just over DKK 2.2 billion is the pension company’s largest single commitment within the unlisted credit asset class. The amount is expected to be invested over the next 18 months.
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