Resilient income
Private credit typically pays floating rate interest, helping protect returns as rates move. Contractual cash flows can provide a stable source of income and enhance yield within a DC portfolio.
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Private credit is playing an increasingly important role in financing the economy, providing the capital that helps businesses invest, grow and thrive. As banks retrench from parts of the lending market and more companies remain private for longer, it is creating opportunities beyond public markets, offering investors potential sources of income, diversification and resilience. For long-term investors, private credit can be a powerful complement to traditional public market allocations.
Funding the economy. Building resilient portfolios.
Long-Term Asset Funds (LTAFs) are designed to help long-term investors such as defined contribution (DC) pension schemes access a broader opportunity set beyond public markets through a structure built for long-term investing.
Why LTAFs?
Designed for the full DC journey
By widening the investable universe available to DC schemes, LTAFs can help diversify portfolios and support long-term member outcomes. The M&G Diversified Private Credit Feeder LTAF is designed to help DC schemes access these opportunities.
Access a broader opportunity set
Gain exposure to parts of the economy that sit beyond traditional public markets.
With DC schemes in mind
A structure created to meet the governance and operational needs of long-term pension investors.
Supporting long-term member outcomes
Access additional sources of income, diversification and resilience through private markets.
Purpose-built for less liquid assets, LTAFs provide access to areas of the economy that have traditionally been difficult for DC schemes to reach, including corporate lending, asset-backed finance and other private credit opportunities. Combining an appropriate liquidity framework with robust governance, they offer a practical route to private markets in a format aligned with the needs of long-term pension investors.
With a minimum allocation to long-term, unlisted assets, LTAFs are designed to harness the benefits of patient capital, giving schemes access to long-term investment opportunities that can help support member outcomes over time.
Diversified access to private credit
M&G Diversified Private Credit Feeder LTAF
Private credit is more than a source of income. By funding businesses and assets across the economy, a diversified approach provides access to opportunities beyond public markets while combining multiple sources of value.
The M&G Diversified Private Credit Feeder LTAF brings together a wide range of private credit opportunities, including corporate lending, asset-based finance, structured credit, real estate debt and infrastructure debt, through a single vehicle designed to simplify access and oversight.
By combining multiple private credit asset classes within a single portfolio, the strategy seeks to deliver diversified sources of income and a more resilient investment experience. The result is a combination of complementary value drivers, including:
- Corporate lending
- Asset-based finance
- Structured credit
- Real estate debt
- Infrastructure debt
Powered by M&G Investments’ extensive private markets expertise and established origination network, the strategy offers a practical way for DC investors to access a broader private credit opportunity set through a single allocation.
Credit diversification
Investing in private credit expands DC portfolios’ exposure to types of companies with different underlying risk drivers beyond traditional public fixed income allocations, building resilience into portfolios.
Simplified access
Private markets can offer a ‘complexity premium’ but requires deep specialist expertise. This LTAF is a tailored solution for DC schemes which gives diversified access to private debt through a single, professionally managed vehicle.
Why M&G?
One platform. Multiple value drivers.
As private markets become increasingly accessible, investors need a partner with the scale, experience and specialist expertise to navigate a growing and evolving opportunity set.
For nearly three decades, M&G Investments has invested across private markets, building deep expertise in corporate lending, asset-backed finance, securitised credit, real estate debt and infrastructure debt.
Bringing these capabilities together within a single platform provides access to a broader opportunity set across the economy and a deep pipeline of investment opportunities.
Supported by an established origination network, specialist investment teams and rigorous credit analysis, our approach combines multiple value drivers to help build diversified portfolios designed to support income generation, diversification and resilience over the long term.
M&G Diversified Private Credit Feeder LTAF
Investment policy:
- The investment objective of the Fund is to provide a return of 5% per annum over SONIA over a medium-term investment holding period of 5 years, after all fees and costs, through indirect investment in a diversified portfolio of investments exhibiting positive ESG risk and opportunity characteristics.
- The Fund will invest at least 90% of its assets into M&G Diversified Private Credit Fund, a Sub-fund of Luxembourg Specialist Investment Funds (4) (the “Master Fund”), the remainder to be held for cash management purposes. The Master Fund seeks to achieve its investment objective by investing, on a global basis, in a wide range of credit investments which overall provide the fund with a contractual coupon income from its portfolio and exhibit positive ESG risk and opportunity characteristics. The portfolio manager will use its credit investment processes and research capabilities to identify investment opportunities for the fund. Such investment opportunities may be obtained by applying a variety of techniques across a potentially wide range of different types of credit investments.
- The maximum level of leverage for this Fund expressed as a percentage of the Fund total exposure to its Net Asset Value (a) under the gross method is 380%; and (b) under the commitment method is 210%. The Fund expected level of leverage exclusive of short-term borrowings under normal market conditions will generally not exceed 200% of the Fund’s NAV based on the commitment method of calculation.
The main risks associated with this fund:
- The value and income from the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.
- ESG data risk: ESG information from third-party data providers may be incomplete, inaccurate or unavailable. As a result, there is a risk that the Investment Manager may incorrectly assess a security or issuer, resulting in the incorrect inclusion or exclusion of a security in the portfolio.
- Liquidity risk: It may not always be possible for the Fund to invest in the Master Fund as the issue of Shares may be limited in certain circumstances. In such a scenario a subscription request to buy Shares in the Fund may be reduced in proportion to what other Shareholders have requested or rejected. Investors should note that their redemption requests may be rejected or only partially met due to a large redemption request triggering the Redemption Limit for a given Redemption Day.
- Risk of suspension or termination of the Master Fund: The Master Fund in which the Fund invests may be suspended or terminated, leading to a lack of liquidity for the Fund and/or suspension of termination of the Fund.
- Please note this is not an exhaustive list, you should ensure you understand the risk profile of the products or services you plan to purchase. Please refer to the Prospectus and/or legal documentation, which includes a description of the investment risks relating to this fund.
Sustainability Information:
- The M&G Diversified Private Credit Fund (‘Master Fund’) will invest a minimum of 20% of the Fund will be invested in Sustainable Investments within the meaning of SFDR. A minimum of 70% of the Company’s NAV will be aligned to environmental or social characteristics promoted by the Fund.
- For further information on our Sustainability disclaimers, please click on the link: https://www.mandg.com/footer/sustainability-disclosures.
Further things you should know:
- The fund will invest predominantly in other funds.
Contact us for more information about the M&G Diversified Private Credit Feeder LTAF
The views expressed on this webpage should not be taken as a recommendation, advice or forecast, nor a recommendation to purchase or sell any specific security.
The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.
M&G Investment Management Limited (MAGIM), M&G Alternative Investment Management Limited (MAGAIM), M&G Securities Limited (MGSL) and M&G Financial Services Limited (MGFS) are registered in England and Wales under numbers (936683, 2059989, 90776, 923891) respectively. The registered address of MAGIM, MAGAIM, MGSL, and MGFS is 10 Fenchurch Avenue, London, EC3M 5AG. MAGIM, MAGAIM, MGSL, and MGFS are authorised and regulated by the Financial Conduct Authority (“FCA”) under numbers 119328, 122011, 122057, 122058 respectively.