Schroders Capital’s Multi Private Credit Fund (MPCF) has reached a second close of £85m, reflecting what it describes as growing demand from UK pension funds for a diversified portfolio of private credit exposure.
The fund, which had its first close in summer 2021, gives small and medium-sized pension funds access to a diverse range of private credit asset classes, including corporate direct lending, real estate debt, infrastructure debt, and specialist credit.
MPCF has already begun to make investments, with commitments to two direct lending funds and three more commitments to other direct lending managers and infrastructure debt expected before the end of the year.
According to Schroders’ 2021 institutional investor study, the vast majority of investors intend to increase their exposure to private assets in the coming year.
The research also found due to the economic and financial impact of the pandemic, 47 per cent of investors said they would continue to diversify into alternative and private markets while reducing their listed exposures.
Investors in MPCF may benefit from a higher yield pick-up over publicly traded fixed income assets due to the ‘complexity premium’ offered by private assets, says Schroders.
Schroders UK institutional co-head Russell Smith says: “A significant trend among UK pension fund clients has been their growing allocations towards private credit strategies. However, the governance burden can be significant when aiming to build a diversified portfolio.
“MPCF solves this challenge for clients of all sizes, providing access to high-quality direct lending, as well as real estate debt and infrastructure debt opportunities which deliver attractive risk-adjusted returns.”
Schroders senior investment director Jeremy Knox says: “The low-interest rate environment is showing little sign of abating amid an increasingly challenging investment landscape for investors. MPCF is designed to offer investors a diverse blend of private credit assets delivered by Schroders Capital’s broad bench of private assets investment experts.”
