AXA IM Alts, a global leader in alternative investments with cEUR163 billion of assets under management, has expanded its suite of Secured Finance solutions for pension fund clients, with the launch of a new Global Secured Assets (GSA) Strategy.
The new strategy invests through an open-ended vehicle across a wide range of assets in both public and private markets to provide clients with a diversified portfolio of global secured finance assets, delivering yield pick up over traditional credit, while focusing on capital preservation.
The strategy leverages the expertise of AXA IM Alts’ Real Assets and Structured Finance teams, to build a blended portfolio of consumer assets, including asset backed securities and residential mortgages; corporate assets, including CLOs, secured and mid-market loans; and real assets including commercial real estate debt and infrastructure debt.
It draws on AXA IM Alts’ global investment platform to identify attractive investment opportunities and aims to build a globally diverse portfolio of assets. This diversification across regions and asset classes, between corporate risks, private consumer risks and real assets risks also provides different drivers of performance when compared to traditional credit. The team aims to capture illiquidity premia through accessing private market opportunities and exploits relative value across assets to drive performance.
The launch comes as pension schemes in the UK and Europe are increasingly looking to diversify their investment portfolios beyond traditional credit instruments and across public and private markets, in the search for higher returns. The actively managed strategy has been designed to take advantage of each phase of the credit cycle, drawing on AXA IM Alts’ extensive sourcing and credit research capabilities, allowing the strategy to tactically deploy capital at speed.
Christophe Fritsch, Co-Head of Securitized & Structured Assets at AXA IM Alts, says: “As pension schemes mature, they face a multitude of challenges, from identifying contractual cashflows, generating higher yields in a low return environment, and diversifying beyond traditional credit. As well as offering a potential yield premium versus traditional credit, secured finance provides diversification benefits by investing in the full scope of debt instruments, secured by different types of collateral, in both the public and private markets. We have seen increasing demand from our pension scheme clients for such a strategy in a more flexible format, to account for the different stages of the scheme’s lifecycle they may be at. This latest strategy is in response to that demand, offering our clients exposure to a diversified portfolio of assets across the public and private markets in an open-ended format that provides some liquidity.”
The new strategy is part of a cEUR74 billion Private Debt and Alternative Credit platform and builds on AXA IM Alts’ existing Global Secured Assets strategies, which have already achieved EUR2.2 billion in assets under management, across a range of multi asset strategies. The team has proven expertise in managing global secured finance portfolios, navigating the Covid-19 crisis with above target returns, and deploying capital efficiently and ahead of schedule. AXA IM Alts’ first Global Secured Assets Fund (GSA I), which was launched in November 2018, now has a three-year track record, delivering on its fund objectives aiming to provide diversification, yield and cashflows, whilst continuing to identify new investment opportunities of high quality diversified secured assets. GSA I is now closed to new investments.
