Edinburgh-based investment giant Aberdeen announced that it has to date raised £233 million for its Abrdn Private Credit SCSp RAIF- Global Fund Finance Fund launch — in its first tranche of fundraising which has been seeded by a number of European and UK pension funds and family offices.
Aberdeen said: “It brings the total raised for this strategy over the year to date to £527m (€609m), with Aberdeen running the same strategy for institutional clients on a discretionary basis – and aiming to build on the existing strong interest from clients globally.
“It is the latest fund finance offering from Aberdeen’s twenty strong team of private credit investors, with an average nineteen years’ experience investing through the credit cycle.
“Aberdeen has been active in this burgeoning space since 2018, through its award-winning fund finance strategy (Insurance Asset Management Award, 2023).
“The launch comes as demand for specialist private credit continues to swell, having become a key tool to unlock potential global growth, as institutions increasingly seek access to credit.
“The Fund will invest in a diverse range of investment grade (or equivalent) subscription line facilities. These are loans made to private markets funds including private equity, private credit, secondaries and infrastructure funds. They are commonly used to bridge the investment activity of a fund, providing certainty of funding and short notice access to liquidity.”
Shelley Morrison, Head of Fund Finance at Aberdeen, said: “Fund finance has grown not just in volume but also in its ability to provide increasingly sophisticated solutions, offering General Partners a series of financing options. It has become a standard part of the toolkit, and as part of the evolution, we are pleased to offer a greater level of flexibility and liquidity relative to other private credit strategies.
“Investors have been keen to access the market because of the potential for attractive risk-adjusted returns with historically low volatility. Fund finance also offers valuable diversification thanks to its low correlation with other asset classes. Of course, no loan is without risk. At Aberdeen, we aim to manage that risk via our highly selective approach and disciplined focus on quality – only supporting general partners and sponsors with strong track records.”
Marianne Zangerl, Deputy Global Head of Fixed Income, Aberdeen, adds: “Momentum continues to build in private credit, as we see asset allocation shifts in favour of specialist private credit strategies. We are focused on areas where we can add significant value for our clients through the generation of an attractive illiquidity premium (the delta between credit spreads in public vs. private markets). This premium is still achievable in less well banked/funded areas of the market, and, this is a sweet spot for us.”