AXA IM raises €2.3bn for significant risk transfer strategy
AXA IM’s alternatives division has raised more than €2.3bn (£1.9bn) for its significant risk transfer (SRT) strategy.
This includes €1.2bn raised for its Partner Capital Solutions 9 fund and €1.1bn from separate managed account (SMA) mandates, including investments from large Danish pension funds and the North American pension fund Arizona State Retirement System.
Overall, the SRT strategy attracted over 46 investors from three continents, with 27 per cent of the funds raised coming from new clients.
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“As allocations to private debt continue to increase from LPs around the world, investors’ focus is shifting towards well-rounded and diversified portfolio construction within the private debt asset class itself; with investors increasingly looking to explore opportunities beyond traditional mid-market direct lending strategies,” said Deborah Shire, deputy head of AXA IM Alts.
“SRT is emerging as a prime investment, offering exposure to a variety of underlying asset classes originating from bank core portfolios, covering large-cap corporates all the way through to granular portfolios of SMEs, including investments in sub-lines and consumer deals.”
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AXA IM Alts noted that SRT is a growing market as SRT deals have become a fundamental balance sheet management tool for an increasing number of banks.
They also provide investors with the opportunity to access banks’ core performing loans at attractive spreads.
“SRTs may offer an effective capital relief tool for banks, whilst simultaneously providing investors with potentially attractive returns,” said Christophe Fritsch, global head of alternative credit at AXA IM Alts.
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“As volatility becomes an increasingly consistent theme for markets and diversification of income becomes critical, SRTs may help provide unique exposure to a private pool of underlying loans, which is driving the demand we are seeing today.
“Backed by the quality and diversification of underlying loan portfolios, alongside spread levels, we believe SRT provides investors with access to stable cash flows and risk-adjusted returns. Achieving such a significant milestone of exceeding our initial fundraising target is a further testament to the strategy’s long track record of delivering compelling risk-adjusted returns.”
AXA IM has more than 20 years of experience within SRT investing and has closed 110 deals since the launch of the strategy.
