LGIM has launched a Short-Term Alternative Finance fund, investing in under one-year private credit assets through areas including capital call facilities, supply chain finance, trade receivables, and asset-backed financing.
The fund was launched on the Luxembourg-domiciled RAIF platform and is aimed at institutional investors including insurance companies, pension schemes, endowments, and family offices. The newly-launched RAIF platform is meant to expand the international offering for LGIM. The company said this will be a “significant enabler” of LGIM’s plans to launch additional international funds on the platform throughout the year.
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The alternative debt investment team, with head of alternative debt Matthew Taylor, will underwrite transactions for the fund. Sam Jones will act as joint fund manager.
“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,” Taylor said.
LGIM launched its first Short-Term Alternative Finance fund in 2021, now managing over £1bn in short-dated strategies.
Nick Bamber, head of private credit at LGIM, said: “We’re proud to have launched a second iteration of this fund and to open it up to investors. Our short-term strategy is a fast-growing area of our business, having deployed over £2bn since 2021.
“Having grown LGIM’s footprint and product offering in continental Europe for several years, 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.”
