The initial funding came from various UK and European pension funds and family offices.

It brings the total raised for this strategy year to date to £527m, with Aberdeen running the same strategy for institutional clients on a discretionary basis – and aiming to build on the existing strong interest from clients globally.

It is the latest fund finance offering from Aberdeen’s twenty strong team of private credit investors, with an average nineteen years’ experience investing through the credit cycle.

Aberdeen has been active in this burgeoning space since 2018, through its award-winning fund finance strategy (Insurance Asset Management Award, 2023).

The launch comes as demand for specialist private credit continues to swell, having become a key tool to unlock potential global growth, as institutions increasingly seek access to credit.

The fund will invest in a diverse range of investment grade (or equivalent) subscription line facilities. These are loans made to private markets funds including private equity, private credit, secondaries and infrastructure funds. They are commonly used to bridge the investment activity of a fund, providing certainty of funding and short notice access to liquidity.

The fund will spread credit risk across the uncalled commitments of a large pool of high-quality, institutional investors, diversified by geography and investor type.

Aberdeen focuses on lending to mid-market funds managed by best-in-class sponsors/General Partners where it believes returns are more attractive than in the larger end of the market.

The investment team is supported by Aberdeen’s in-house structuring team, ensuring in-depth due diligence and robust security packages in the legal documentation. Additionally, the strong private credit operations platform enables the team to achieve a complexity premium in our transactions: they can invest in Revolving Credit Facility (RCF) formats as well as Term Loans, extend multi-currency facilities, and offer same-day USD funding. These are all differentiating factors that enable Aberdeen’s fund finance team to achieve attractive complexity premia for their clients.

Shelley Morrison, head of fund finance at Aberdeen, said: “Fund finance has grown not just in volume but also in its ability to provide increasingly sophisticated solutions, offering General Partners a series of financing options.

“It has become a standard part of the toolkit, and as part of the evolution, we are pleased to offer a greater level of flexibility and liquidity relative to other private credit strategies.

“Investors have been keen to access the market because of the potential for attractive risk-adjusted returns with historically low volatility. Fund finance also offers valuable diversification thanks to its low correlation with other asset classes.

“Of course, no loan is without risk. At Aberdeen, we aim to manage that risk via our highly selective approach and disciplined focus on quality - only supporting general partners and sponsors with strong track records.”

Marianne Zangerl, deputy global head of fixed income, Aberdeen, added: “Momentum continues to build in private credit, as we see asset allocation shifts in favour of specialist private credit strategies.

“We are focused on areas where we can add significant value for our clients through the generation of an attractive illiquidity premium (the delta between credit spreads in public vs. private markets). This premium is still achievable in less well banked/funded areas of the market, and, this is a sweet spot for us.”

John McCareins, chief client officer, Aberdeen, said: “We are thrilled to build on our institutional custom capabilities with the Fund Finance product launch.

“The strategy is innovative, timely and aims to solve our clients’ key investment challenges. Our Fund Finance franchise has grown significantly across pensions, insurers and family offices spanning the Americas and Europe and we aim to build on this.”