Structured finance

Investment grade structured credit

Senior ABS

Our strategy focuses on predominantly senior, AAA-rated ABS and CLO opportunities that generate predictable and defensible short-dated cashflows. These can offer attractive risk-return profiles relative to equivalent-rated traditional corporate bonds and daily liquidity.
 

Investment grade ABS

Our strategies invest in a broad range of investment grade ABS largely within the European Structured Credit universe, including high-quality consumer-backed securities (RMBS, Consumer ABS) and CLOs. These strategies target attractive risk-returns and can offer compelling diversification to client portfolios. These are open-ended vehicles catering to different liquidity needs by offering either daily or monthly liquidity terms.
 

Investment grade mezzanine ‘BBB’ ABS

Our strategies focus on investing in diversified BBB-rated, mezzanine opportunities largely within the European Structured Credit universe and target value in credits which we believe offer an attractive structure or risk-adjusted return profile. These are open-ended vehicles offering monthly liquidity terms.
 

Mortgage income and consumer income (whole loans)

Our strategies invest in residential mortgage loan or consumer loan receivables focusing on stable income generation and capital preservation. We utilise a unique partnership model through forward flows, financing new loan origination or acquiring seasoned loan pools on a whole loan basis. These are ‘evergreen’ structures that offer limited liquidity to investors and semi-annual income distributions – with dedicated UK and pan-European exposures available.
 

Investment grade CLOs

We offer clients the option to invest in dedicated mandates focusing on investment grade and typically AAA-rated tranches of predominantly European CLOs.

High yield structured credit

High yield ('Best opportunities')

Our high yield structured credit strategy launched in May 2008 that invests across the public and private structured credit asset spectrum, by taking a multi-asset approach to portfolio allocation based on value and bottom-up fundamental credit analysis. These strategies primarily invest in the mezzanine and junior debt tranches of: CLOs (debt, equity, warehouse), Consumer ABS, SRTs, Consumer Specialty Finance and Corporate Specialty Finance.

This is an evergreen proposition featuring monthly dealing terms with limited liquidity available. We also run a number of bespoke mandates under the Best Opportunities strategy for clients looking for tailored asset allocations and liquidity terms.
 

Significant risk transfer

We have been investing in the Significant Risk Transfer (SRT) market since its inception in Europe in 2008. We run dedicated strategies investing in the first and second-loss tranches of synthetic SRT transactions, seeking attractive risk-adjusted IRRs and cash multiples. We source opportunities across a global opportunity set but with a bias towards Europe given our preference for SRT transactions that offer exposure to the core lending assets from top-tier banks in core jurisdictions. These typically offer the strongest creditor protections in asset types where M&G already has existing in-house expertise.
 

Specialty finance

Our dedicated strategies invest predominantly in residual and lower mezzanine securities / notes secured by granular pools of assets (especially receivables) – primarily from the world of consumer finance including residential mortgages and consumer loans. They primarily focus on European opportunities given higher barriers to entry and significant growth potential of the asset class. We source investments from both banks and non-bank, specialty lenders, including direct, bilateral origination as well as sourcing in primary and secondary securitisation markets. These strategies are typically closed ended in nature, potentially offering low to mid teen net IRRs and attractive cash multiples.

Royalties and Asset based equity

The strategy has been run since 2018, deploying capital on behalf of our internal client, by financing platform businesses across several strategies and geographies. Our investment leverages three robust internal capabilities: assetbacked finance, early-stage private equity, and fund investments and coinvestments.

Once established, these specialised platforms offer reliable access to diversified and esoteric assets including financial assets, royalties, receivables that generate recurring, typically contractual, cashflows and hard, physical assets (e.g. aircraft, rolling stock auto fleets) – helping to scale investments and expand platforms.

We see substantial growth opportunities within the existing GPs we have established, as well as through the creation of new platforms in different sectors.  

Please note that not all mentioned strategies may be available or registered for sale in all jurisdictions.

The views expressed on this webpage should not be taken as a recommendation, advice or forecast. 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.