London CIV: “Alternative Credit Fund launched”

14 February 2022

London CIV is pleased to announce the launch of its Alternative Credit Fund. The Sub-fund was launched this month with three seed investors. Initial Assets Under Management (“AuM”) for the Sub-fund is £398m.

The Sub-fund’s objective is to seek a return of SONIA +4.5%, net of fees, which it is expected to achieve by investing in securitised assets, loans, high yield corporate bonds, and convertible bonds and, in addition, investment grade corporate and government bonds. The Sub-fund will seek exposure to these assets either indirectly or directly.

Indirect exposure to these assets will be accomplished by investing the Sub-fund solely in the CQS Credit Multi-Asset Fund, an alternative investment fund, authorised by the Central Bank of Ireland. The underlying investment manager (CQS), which has been appointed by London CIV, aims to deliver stable returns while optimising yield within the sub-Investment Grade credit market. A key focus within sub-Investment Grade are floating interest rate credit instruments within the senior secured loans market and asset backed securities (“ABS”), which is expected to result in lower interest rate sensitivity for the overall portfolio.

The London CIV have been working closely with CQS in ways to improve its environmental, social and governance (“ESG”) processes which has led to the underlying CQS strategy being classified as Article 8 under the Sustainable Financial Disclosure Regulation (“SFDR”) which means it promotes ESG characteristics. Furthermore, London CIV were pleased that CQS has become a signatory to the Net Zero Asset Managers’ Initiative and they are currently in the process of setting interim targets to achieve net zero by 2050.

Source: London CIV