London CIV has launched an Alternative Credit Fund sub-fund with three seed investors and initial assets under management (AuM) totalling GBP398 million.

The sub-fund’s objective is to seek a return of SONIA +4.5 per cent, net of fees, which it is expected to achieve by investing in securitised assets, loans, high yield corporate bonds, and convertible bonds and, in addition, investment grade corporate and government bonds. The sub-fund will seek exposure to these assets either indirectly or directly. 

Indirect exposure to these assets will be accomplished by investing the sub-fund solely in the CQS Credit Multi-Asset Fund, an alternative investment fund, authorised by the Central Bank of Ireland. The underlying investment manager (CQS), which has been appointed by London CIV, aims to deliver stable returns while optimising yield within the sub-Investment Grade credit market.

A key focus within sub-Investment Grade are floating interest rate credit instruments within the senior secured loans market and asset backed securities (ABS), which is expected to result in lower interest rate sensitivity for the overall portfolio.