Private Corporate Debt
Financial investments involve an element of risk. For further information, please see the risk warning section.
Our Private Corporate Debt strategy focuses on senior investment grade and senior sub-investment grade lending to corporates.
These are private placements and bilateral loans across a variety of sectors and issuers, ranging from investment-grade borrowers to small-to medium-sized enterprises (SMEs). This market is aimed at issuers that may be too small to access capital markets or seasoned issuers who may prefer smaller/club deals with a few institutional investors. Because the counterparties can be very diverse, successful investment requires the resources to conduct appropriate credit analysis and the expertise to understand the risks, both at the time of initial investment and also on an ongoing basis. The private nature of these deals means that while they generally offer a higher level of premia than comparable public deals, they can also offer additional risk mitigation through stronger covenants and reporting requirements.
With capabilities spanning Western Europe and the UK, we implement mandates with a strong emphasis on generating attractive risk-adjusted returns for our investors.
In the UK, we have a dedicated private placements team which has been investing since 2006. It has a strong track record and manages over £1.5 billion1 of private placements in bespoke liability matching mandates.
In Continental Europe, we have a Paris-based team who manage over €635 million1 and who focus on private corporate debt from mid-sized issuers not yet able to tap the broader capital markets. In the US, corporate loans and private placements are sourced by our team in Chicago which typically provides funding for large companies seeking to do off-market, bilateral transactions. Our US team also accesses leveraged loans through the bank syndication market.
1Source:Aviva Investors as at 30 September 2017
Investing in corporate loans and private placements is a natural extension of our debt capabilities. As the asset management arm of one of the world’s largest insurers, investing in fixed income is a cornerstone of our business.
Head of Private Corporate Debt
Sample transaction: European energy and communications company
- Unique opportunity to access exposure to a credit through a post-IPO financing offering an attractive risk-adjusted spread
- Access to the deal from inception increased returns through upfront fees
- Borrower has excellent track record showing an efficient business model and long-term strategy
- Very large customer base with large proportion of small contracts providing recurring revenues and strong cash flow generation
|Counterparty||Corporate - energy and communications|
|Sector||Industrial goods and services|
|Investment size||€40 million|
|Spread (at inception)||3M Euribor + 279bps|
Counterparties can be diverse, so successful investment requires appropriate credit analysis and the expertise to understand investment risks.
Certain assets held in the fund could, by nature, be hard to value or to sell at a desired time or at a price considered to be fair (especially in large quantities), and as a result their prices could be very volatile.
The value of an investment and any income from it can go down as well as up. Investors may not get back the original amount invested.
Learn more about Alternative Income Solutions
For further information contact your Client Relationship Director or Rachel Green, Client Solutions Manager
+44 (0)20 7809 6809*
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