John Hancock Investment Management has launched a fund which allows accredited investors to invest in a wide variety of loan assets, the fund’s sponsors announced yesterday.
The new fund, the John Hancock Asset-Based Lending Fund, expands the alternative products offered by John Hancock Investment Management. The fund is sub-advised by Marathon Asset Management, a global credit investor with nearly 25 years of experience investing across multiple sectors, including structured credit and asset-based lending.
The fund aims to provide high current income and, to a lesser extent, capital appreciation, John Hancock Investment Management said. The fund’s managers plan to invest at least 80% of its net assets (plus any borrowing for investment purposes) in asset-based lending investments, which may include distressed loans.
The fund is managed by Louis Hanover, co-founder, managing partner and chief investment officer of Marathon; by Andrew Springer, Partner and Senior Portfolio Manager; and by portfolio manager Edward Cong.
“The fund pursues a flexible, all-weather approach to private credit with the aim of delivering strong returns with low volatility and low correlation to other asset classes throughout the market cycle,” said John. Hancock Investment Management. “This will allow it to leverage a strong portfolio of asset-based capital solutions across all sectors in which Marathon has deep analytical capabilities and experience.”
• Medical loans and royalty-backed credits, including medical loans secured by revenue, intellectual property rights, and royalty streams primarily from FDA-approved drugs and devices;
• Transportation assets, such as loans and leases secured by commercial aircraft and shipping vessels;
• Residential mortgages — origination and acquisition of residential real estate loans and legacy mortgage pools include distressed or non-performing loans and new agencyless mortgages;
• Commercial real estate loans: the origination and acquisition of commercial real estate loans are secured by housing-related and traditional types of commercial real estate;
• Consumer Assets: Consumer loan acquisitions include distressed loans and high-yield asset-backed securities backed by various forms of non-mortgage household debt, which are largely concentrated in certain segments of the consumer market. market such as auto loans and leases, credit cards and personal installment loans;
• Asset-Based Corporate Credit — Asset-based corporate credit is secured by real estate, equipment, receivables, inventory, and intellectual property rights, among other assets; and
• Liquid securitized credit — these are securities backed by residential real estate, commercial real estate, secured mortgage bonds, secured business loans and other asset-backed securities.
Marathon determines asset allocation at the portfolio sector level and considers several factors in its asset allocation, including but not limited to portfolio level credit risk, geographic and sector diversification , interest rate risk, optimization of capital deployment and macroeconomic conditions. The fund is not limited in the amount of its assets that can be allocated to any sector, John Hancock Investment Management said.
The shares of the fund are illiquid and therefore the fund should be considered as a speculative investment with substantial risks. Investors could lose all or substantially all of their investment. The shares of the fund are not listed on any stock exchange and it is not expected that a secondary market for the shares of the fund will develop. Therefore, the investment may not be suitable for investors who may need the money they invest within a specified time frame, the company said.
Additional fund information is available here.