Demand from fund managers for alternative income and credit assets is increasing.
Hawksmoor Investment Management has added to its stake in the RM Secured Direct Lending investment trust.
The Hawksmoor team, whose portfolios include the £130m Hawksmoor Vanbrugh and £111m Hawksmoor Distribution funds, have backed the investment trust since its launch in 2016.
Offering investors exposure to secured lending assets to UK SMEs and mid-market corporates, the RM Secured Direct Lending portfolio has grown to £85m in assets following a recent C share issue and has plans to raise more cash soon. It has just announced that its latest dividend has brought its first full year of pay-outs exceeded targets.
Ben Conway, fund manager at Hawksmoor, says the team like the RM fund owing to the “very bespoke” nature of the loans they provide.
“We gain comfort from how they can dictate the terms of the loan and who they lend to. They have excellent relationships which gives them access to good deal pipeline and they occupy a niche many others can’t reach,” he said.
“This is because the size of the loans prevent larger lenders from bothering and the bespoke nature of the loans involve a labour intensive process that many lenders aren’t set up to cater for,” he added.
Conway says the Hawksmoor investment management team has been adding to its stake - undisclosed but at estimated at aprroximatley £3m - and may well also add more in the next fund raise.
“We still like the alternative income space but are very picky about which funds we invest in. We are wary about all sorts of factors: fees, corporate governance, maturity of the market to name a few.”