Schroders raises $1.5 billion for private credit funds

Schroders’ Securitised Credit Team has announced the closure of its FOCUS II* private credit fund, having raised $1.5 billion since its launch in Q2 2020.

The Fund – which has specifically received commitments from both UK and US-based institutional investors - takes total assets raised by the Securitised Credit Team since its acquisition in 2016, to over $15 billion.

The team specialises in asset-backed solutions across a broad toolkit, including securities and loans spanning consumer receivables, housing, commercial real estate and commercial assets.

The team seeks to deliver solutions across the return and liquidity spectrum.

The closing of FOCUS II is a key achievement, further underscoring Schroders’ commitment to growing its Private Assets platform, a strategic focus for the firm.

Michelle Russell-Dowe, Head of Securitised Credit, Schroders, commented:

“As we mark the beginning of a prolonged environment of low interest rates, which we call ‘#TheZero’, it is especially important to identify and deliver on investment options that access a diverse set of opportunities, including those in complex and inefficient markets. The Zero presents incredible challenges, and we look forward to being part of the solution set.

“Against a backdrop of economic and social change, we see a sequence of opportunities. Not all opportunities manifest at the same time in a cycle and, for our fund, we see near-term opportunities.

"These are in housing and our view is that additional opportunities in consumer debt and real estate, will continue to develop. Of critical importance is the flexibility to access these opportunities in their more attractive formats, ranging from public securities to private loans.

“FOCUS II represents an incredible opportunity to match those opportunities with a fund structure that we think is well best positioned to deliver an attractive investment outcome to our clients and partners.”

Nicholas Pont, Investment Director, Schroders, commented:

“The team has a proven track record of investing across credit sectors and capital structures during periods of volatility.

“At a time of great uncertainty we have been able to deliver an approach that incorporates our full value proposition and our ability to work across public and private markets that aim to seek robust returns that efficiently safeguard our clients’ capital through an evolving and uncertain credit cycle.”  

Schroders’ Securitised Credit Team is based across London and New York. Its focus encompasses the full spectrum of global securitised assets such as mortgage-backed securities (commercial and residential), asset-backed securities and asset related private debt markets. 

Environmental, social and corporate governance factors are, where consistent with our fiduciary obligations, naturally embedded within the team’s research to ensure a thorough review of governance, fair lending, loan health for consumers, and a review of collateral factors such as location with respect to climate and well-being.

Schroders Private Assets and Alternatives business, a strategic growth area for the firm, manages £45.3 billion** in assets, including private equity, hedge funds, infrastructure finance, insurance-linked securities, commodities, real estate, impact investing and securitised credit.

To view, Schroders’ research focused on #TheZero, please click here.

*FOCUS II, L.P.