“Through our investment with Metrics Credit Partners, Australia’s syndicated loan market provides IOOF Multimix [the company’s multi-manager funds] with stable, cash-yielding investments diversified across senior loans to Australia’s most creditworthy borrowers,” IOOF chief investment officer Steve Merlicek said.
IOOF believes gaining access to this asset class is attractive as it helps in diversification and offers “superior risk-adjusted returns”.
“Australia’s corporate loan market demonstrates many attractive features for a fixed-income investor,” Stanley Yeo, portfolio manager of strategy and fixed interest at IOOF said.
“These loans are priced over bank bills, so have negligible duration risk and these corporates are in good financial health as they have de-lavered considerably since the GFC.”
The syndicated loan market has traditionally been inaccessible to non-bank investors because of the considerable capital required to invest.
“Australian investors have been starved by banks of genuine local corporate fixed income and credit opportunities until now, and IOOF Multimix is a first mover in non-bank participation in this attractive asset class, which will ultimately benefit their investors,” said Graham McNamara of Metrics Credit Partners.
“IOOF Multimix’s investment demonstrates a strong ability to identify value on a risk-adjusted basis across local and global corporate fixed income and credit markets.”
The loans are made up of a combination of Australian public and private companies and projects that invest in the full credit spectrum, across industries and loan products.
The loans form part of IOOF's investment strategy and will be made available to the firm’s financial advisers.
