Mandatum plc, press release, 6 October 2023 9:00 am
The assets under management of Mandatum’s client loan products exceeded the one-billion-euro threshold at the end of September. Changes in the market environment, especially rising interest rates, have increased the attractiveness of fixed income investments.
Mandatum’s clients have invested over a billion euros in loan products, which Mandatum has offered to its clients since 2016. Over the past four years, the assets under management of its strategies investing in European leveraged loans have grown by almost 600 per cent, and the one-billion-euro mark was crossed in September 2023.
Senior secured loans, or leveraged loans, offer investors a lower interest rate risk as floating rate instruments and an opportunity to improve the diversification of their portfolios. The rise in interest rates has thus continued to support the growth of Mandatum’s loan products.
“The growth is significant and reflects the growing interest in the asset class, as well as the success of the strategy we have implemented. Leveraged loans are seen as an important and complementary part of a well-diversified fixed income portfolio”, says Portfolio Manager and Head of Leveraged Finance Alexander Gallotti.
The European leveraged loan market is a non-public market, accessible only to institutional investors established in the market. Mandatum is one of the leading investors in the Nordic leveraged loan market and one of only a few Finnish investors investing broadly in the European loan market.
Both institutional and, to an extent, private investors from Finland and other Nordic countries have invested in Mandatum’s loan strategies. Three loan strategies are offered to customers, of which two strategies are open-ended with the possibility for monthly subscriptions. The newest strategy is Mandatum’s first Sustainable Finance Disclosure Regulation (SFDR) Article 9 compliant fund with a measurable sustainable investment objective.
“Despite the market turbulence, the gross returns of the loan strategies between January and September 2023 have been very strong, and the current yield-to-maturity of 8-9 per cent is still attractive, in our view, on an absolute and relative basis from a risk/return perspective”, Gallotti states.
Head of Leveraged Finance
Phone: +358 10 209 8172
Senior Vice President, Marketing and Communications
Phone: +358 40 728 1548
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