AMP launches standalone global private market fund

AMP has launched a new private market fund promising investors bespoke access to global private debt investments, including credit risk notes, in developed markets.

The newly launched AMP Alternative Debt Fund is accessible for AMP super fund members invested in its MySuper or Future Directions options range.

The fund will be part of the diversified credit sector, complementing AMP’s existing range of diversified investments.

The fund provides exposure to both credit risk transfer and flexible credit solutions.

The former will involve the purchase of credit risk notes from issuing banks insuring the first loss on a diversified pool of high-quality loans. This, AMP said, would provide regulatory capital relief to the banking institution to maintain their relevant Tier 1 capital ratios.

Flexible credit solutions, according to the the firm, will provide a wide remit to take advantage of opportunities in special situations, distressed credit, as well as short- and long-term opportunistic lending.

AMP will kick in an initial $300 million investment into the fund, managed through two external managers.

Anna Shelley, AMP’s chief investment officer, said the fund would boost AMP’s existing range of diversified investment options, with an aim to generate higher long-term returns with a lower correlation to the listed markets.

She added: “By combining credit risk sharing with more of an opportunistic strategy, AMP is paving the way forward for standalone international private debt strategies that can deliver for our members and customers over the long term with valuable exposure to private markets.

Allocation to private debt is estimated to be around US$1.7 trillion (AU$2.58 trillion) globally in institutional assets under management, according to McKinsey. Of this, around AU$200 billion is estimated from Australian investors, data from EY shows.