M&G launches €500m private credit ELTIF

investmentweek.co.uk:

Although the strategy will initially only be available for professional investors, the asset manager said it has plans to widen access in early 2024.

The M&G Corporate Credit Opportunities strategy will be managed by the firm's private credit team, part of its €86bn private markets business. 

Although the strategy will initially only be available for professional investors, the asset manager said it has plans to widen access in early 2024, following on from new ELTIF regulation coming into place. Prudential's With Profits Fund has already committed €500m to the new fund.

M&G Corporate Credit Opportunities will blend complementary private corporate credit asset classes, but will also have the ability to adjust its weightings to reflect the best relative value, the firm said. As such, the strategy will comprise an illiquid and liquid corporate credit bucket. 

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The illiquid corporate credit bucket will invest in best opportunities at the higher yielding end of the spectrum and should represent 15-30% of the total portfolio. It will seek large and mid-market direct lending opportunities and junior loans, with strong covenants. 

Meanwhile, the liquid corporate credit bucket will represent 70-85% of the portfolio and will predominantly focus on floating rate, senior secured syndicated loans. 

The strategy targets returns of Euribor +5-6% gross of fees over the medium term, with gross potential yields estimated between 9-10% as of the end of October. 

Catherine Ross, head of private Credit at M&G, said private credit represented an «attractive source of floating, stable income and uncorrelated returns». 

«Once a niche asset class, the significant growth in