Luxembourg / Helsinki, April 15 2021
“We have successfully invested our Group’s insurance assets into private debt for over ten years now and managed four fund of fund vintages for our local clients. We are excited about the collaboration with Universal-Investment and bringing their expertise to cater European investors in this rapidly growing area,” says Lauri Vaittinen, CEO, Mandatum Asset Management.
The private debt fund of fund will inter alia be making a variety of private debt investments via target funds in Europe and North America. Through this highly diversified profile and a blended return target in the high single digits, the fund of fund offers eligible investors attractive risk-adjusted returns.
The fund’s target size of 200 million Euros is expected to be reached rather quickly, as demand for private debt financing is high. “We are excited about the cooperation with Mandatum Asset Management as we have seen institutional investors’ appetite for private debt skyrocketing in recent months. They appreciate the predictable income as well as the - compared to traditional asset classes - superior returns,” comments Dr Sofia Harrschar, Universal-Investment’s Head of Alternative Investments.
In recent years, institutional investors have in fact continuously taken market share from banks in financing company acquisitions. According to data from S&P Global Market Intelligence, 80 per cent of European M&As were financed by Institutional investors in 2019. In 2010, their share was just 34 per cent.
Apart from the low interest rate environment that drives institutional investors to look at alternative investments such as private debt and private equity, tightening bank regulation fuels their activities as well. The Basel III regulation, which will take full effect on 1 January 2022, is expected to further hit the banks’ lending capacity.
At Universal-Investment, demand for private debt significantly increased in the past twelve months as well. Mandatum Asset Management marks one of the first fund initiators from the Nordics for the group who is active in this space, showcasing the group’s increasing international footprint.
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Disclaimer: It is to be taken into account that the fund is marketed solely in Germany and Austria at the moment. Thus, it is important to tell that in
Germany: Marketing will be solely conducted to semi-professional or professional investors. However, they must not be distributed or offered to retail investors not qualifying as semi-professional investors or professional investors.
Austria: Marketing will be solely conducted to professional investors. However, they must not be distributed or offered to retail investors not qualifying as professional investors.
SCSp fund of fund to be made available for (semi-)professional investors
Investments in European and Northern American private debt planned