A new guide to help pension funds and trustees understand and explore alternative credit investments was launched this week by the National Association of Pension Funds (NAPF).
Interest in investing in alternative credit is growing because of the decline in bank lending across Europe in the wake of the financial crisis. This has opened up new opportunities for investors.
The guide is the latest addition to the NAPF’s popular made simple series and offers pension funds and investors an overview of alternative credit, and explores the three key asset classes: mezzanine, real estate debt and infrastructure debt.
It also highlights how alternative credit can be used to match pension fund liabilities, and suggests a checklist for trustees who are considering adding this asset class to their portfolio.
Joanne Segars, Chief Executive, NAPF, said:
“The fall in bank lending has led to a structural shift in the way that companies are sourcing funding, and has opened up opportunities and growing interest in alternative credit strategies.
“The market for investing in alternative credit is evolving and many pension funds will want to be comfortable with potential operational and technical issues before they step into this asset class. This guide is a useful primer for anyone wanting to understand the key issues.”
The guide, Investing in alternative credit made simple, is written and sponsored by Intermediate Capital Group plc. It is being launched at the NAPF Regulation Conference in London today.
Dagmar Kent-Kershaw, Head of Credit Fund Management, ICG said:
“ The search for alternative yield for pension funds has never been more significant, and one of the issues for trustees looking at alternatives is knowing how to evaluate a new opportunity fully. This guide has been produced to provide a grounding in understanding alternative credit investing, demystify the strategies and providing some fundamental principles on how to get started, all from a Trustee perspective.”
The guide (hard copy) costs £18 for NAPF members and £35 for non-members. It can be ordered online at www.napf.co.uk
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