UK pension client demand drives Schroders Capital Multi Private Credit Fund’s second close

Schroders Capital’s Multi Private Credit Fund (MPCF) has reached a second close of £85 million amid growing demand from UK pensions for a diversified portfolio of private credit exposure.

The fund, which had its first close in summer 2021, enables small and medium-sized pension schemes to access the spectrum of private credit asset classes, encompassing corporate direct lending, real estate debt, infrastructure debt and specialist credit.

MPCF has already begun to make investments with commitments to two direct lending funds, and a further three commitments anticipated before the end of the year to other direct lending managers and infrastructure debt.

MPCF draws on the best of Schroders Capital’s in-house private credit expertise combined with rigorous manager selection.

Russell Smith, Co-Head of UK Institutional, Schroders, commented:

“A significant trend among UK pension fund clients has been their growing allocations towards private credit strategies. However, the governance burden can be significant when aiming to build a diversified portfolio. 

“MPCF solves this challenge for clients of all sizes, providing access to high-quality direct lending, as well as real estate debt and infrastructure debt opportunities which deliver attractive risk adjusted returns.”

According to Schroders Institutional Investor Study 2021, the vast majority of investors plan to ramp up their private assets exposures over the next 12 months. Furthermore, 47% of investors stated they will continue to diversify into alternatives and private markets and reduce their listed exposures, driven by the economic and financial impact of the pandemic.

Due to the ‘complexity premium’ offered by private assets, investors in MPCF have the potential to benefit from a higher yield pick-up over publicly traded fixed income assets.

Jeremy Knox, Senior Investment Director, Schroders Capital, commented:

“The low interest rate environment is showing little sign of abating amid an increasingly challenging investment landscape for investors. MPCF is designed to offer investors a diverse blend of private credit assets delivered by Schroders Capital’s broad bench of private assets investment experts.”

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