Mandatum’s loan strategies investing in European and Nordic leveraged loans have continued their strong growth, with assets under management rising to around EUR 1.6 billion at the end of November. Mandatum is one of the leading Nordic investors in the European leveraged loan space.
Mandatum has offered its clients loan investment products since 2016. Mandatum is one of the leading Nordic investors in the leveraged loan market, and one of only a few Finnish players investing broadly in the European loan market. Over the past ten years, European leveraged loans have had high risk-adjusted returns, relatively stable returns even in periods of elevated volatility, and a low correlation to other markets, especially equities.
The assets under management of Mandatum’s client loan products rose to around EUR 1.6 billion at the end of November. These include a loan fund launched in 2022 for international professional investors which has now exceeded EUR 550 million. Mandatum’s total assets under management in loan investments, including among others Mandatum Life Insurance Company Limited’s with-profit loan investments, have increased to almost EUR 2 billion.
“Leveraged loans offer investors access to a large distinct institutional market, not covered with other instruments, with a main focus on financing large mergers and acquisitions. They also offer portfolio diversification benefits and improve the portfolio’s risk/return ratios. Right now, the yield-to-maturity is over 7 per cent, which we think is attractive also in absolute terms,” says Head of Leveraged Finance Alexander Gallotti.
The European leveraged loan market is a non-public market, accessible only to established institutional investors. The loan strategies are managed by Mandatum’s experienced team of portfolio managers and investment professionals, who have long and broad expertise in successful loan and fixed income investing.
Interest in the fixed income market continues
In addition to the loan market, other fixed income markets continue to draw investors’ interest. Mandatum’s Nordic High Yield Total Return fund, which invests in Nordic bonds, exceeded EUR 700 million in assets under management in early December, making it one of the biggest funds on the Nordic high yield bond market. The fund, which invests in high-yield corporate bonds, was awarded both ‘Best Fund over 3 years’ and ‘Best Fund over 5 years’ in the Bond Europe High Yield category in the Lipper Fund Awards 2024.
“Interest in the fixed income market has remained strong, and investors have included credit as an important part of their total allocation. The increasing popularity of our loan and credit strategies reflects our clients’ strong trust in our products and in us as an investor,” says Gallotti.
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