Moelis Australia’s Fixed Income Fund (the Fund) has achieved a Recommended Plus rating from Independent Investment Research (IIR).
Featuring a market-first capital buffer, the Fund is designed to prioritise investor returns.
The unique fund structure is anchored around a material co-investment by Moelis Australia. This co-investment, an amount equivalent to 10% of the fund’s capital, is designed to act as a capital buffer for investors, absorbing any realised losses ahead of any investor.
The fund will provide investors with exposure to a diversified credit portfolio and is targeted to deliver regular, stable returns equivalent to the RBA cash rate plus 4% per annum (currently 5.25%). The fund will pay distributions every month.
The investment portfolio will include exposure to consumer, accounts receivable and commercial credit product and will leverage Moelis Australia’s proprietary credit platforms.
Moelis Australia Head of Asset Management, Andrew Martin, said the fund was a continuation of the firm’s growing offering in credit.
“We have been building our credit expertise in the firm rapidly over the last few years, particularly as market conditions have driven increasing demand for credit beyond authorised deposit-taking institutions.
“Obtaining an Australian credit licence last year was pivotal in broadening our ability to originate our own range of credit products and subsequently new fund investment opportunities,” he said.
The IIR report acknowledges this capability stating, “…(our) confidence in the Manager’s ability to capably pursue and manage the credit initiatives that comprise the underlying portfolio of the Fund are testament to Moelis Australia’s market leading expertise in certain credit segments. It provides IIR with confidence of the Manager’s ability to deliver on outsized returns relative to risk and to preserve capital.”
Andrew Martin said the Fund was created to respond to current market sentiment.
“With ongoing equity market volatility and uncertainty around franking credits, we are seeing increasing interest in lower risk, annuity style products,” he said.
Moelis Australia currently manages credit investments on behalf of high net worth and institutional investors in excess of $600m. The firm also offers the open-ended Moelis Australia Secured Loan Series, a fund which manages in excess of $200m1 portfolio of loans secured by registered first mortgage loans over Australian real property.
Moelis Australia Asset Management is part of ASX-listed Moelis Australia and currently has in excess of $3.7bn in assets under management.
The Moelis Australia Fixed Income Fund and the Moelis Australia Secured Loan Series are wholesale investment funds that are only open to wholesale investors as defined in the Corporations Act 2001.
1 July 2019