The M&G Diversified Private Credit Feeder Long-Term Asset Fund will launch with £74m, with 90% of its assets invested into the M&G Diversified Private Credit Fund, which is a Luxembourg vehicle. The rest of the allocation will be in cash. 

It will be mainly targeting the UK defined contribution pension schemes. The firm claims the LTAF will enables DC pension schemes and other professional investors to access a broader range of credit opportunities and uncorrelated returns, including lending to businesses and financing infrastructure, real estate and other assets that that are often difficult to access through listed fixed income markets.

Neil Godfrey, global head of client group at M&G Investments, said: “Our first LTAF brings to DC pension schemes a private credit capability that M&G has delivered to DB pension schemes and other institutional investors for more than 25 years. As part of a diversified portfolio, private markets can play an important role in pension portfolios by providing returns that are less dependent on equity and bond markets, helping to improve risk-adjusted returns and resilience. M&G’s Diversified Private Credit Feeder LTAF is designed to support savers throughout their investment journey, helping to grow savings during their working lives while providing a reliable source of income in retirement.”

Simon Iversen, manager of the M&G Diversified Private Credit Feeder Long-Term Asset Fund, said: “As European private and structured credit grows, investors have access to an increasingly broad and diverse range of lending opportunities. By taking a disciplined and selective approach – backing the right businesses, with the right structures and terms – we can use our expertise in credit selection, structuring and risk management to identify the most attractive opportunities, target attractive income and build resilient portfolios that can perform across different market environments.”