By Daniel Lanyon on 4th June 2018
The investment manager of the RM Secured Direct Lending investment trust is positioning the new portfolio as a one-stop shop for exposure to areas such as specialist real estate, alternative lending and infrastructure.
Specialist alternative investment manager RM Funds has launched a new ‘first of its kind’ multi-asset portfolio targeting income returns of 5 per cent with a 7-8 per cent target total return.
The VT RM Alternative Income Fund, an actively managed open-ended portfolio, will offer ‘defensive’ exposure to niches areas normally only accessible through single strategy investment trusts or platforms. It will be open to smaller institutional investors as well as wealth managers and the retail market too.
The UCITS V fund will offer diversified portfolio of alternative income generating, and predominantly listed, assets. The portfolio will invest in securities across specialist real estate, alternative lending and infrastructure.
RM Funds’ Principal - Investment Manager, Pietro Nicholls, says the portfolio will focus on capital preservation and income generation with the fund offering investors interest rate and inflation protection in a low yield and rising interest rate environment. In addition RM’s investment managers will select holdings with low correlation to the wider equity and fixed income markets.
Nicholls told AltFi that with global markets threatened by a world “not in great shape” owing to the ever-expanding risks emanating from geopolitics, US president Donald Trump and more recently the eurozone, the fund will offer a safety buffer for income investors.
“The fund is designed to be a single investment that offers investors and asset allocators exposure to an actively managed diverse portfolio of alternative income-producing assets which traditionally have been seen as defensive, less volatile and uncorrelated with the wider equity and fixed income markets to generate reliable and stable income well insulated from increases in market volatility and macro- economic conditions.”
Nicholls says within the next 4-5 years the portfolio could comfortably increase to £500m of assets under management. The fund is available on most investment platforms will see charges capped at 0.85 per cent.
“VT RM Alternative Income will offer investors stable income, with reliable returns and downside risk protection from low yields, the rising interest rate environment, increasing economic uncertainty and Brexit,” Nicholls said.
RM Funds is a trading name of RM Capital, which specialises in alternative credit fund management. Founded in 2010, with offices in Edinburgh, and London, it has transacted in excess of £50bn of bonds and loans since its inception, and advised or originated, structured and managed the due diligence process for over £1bn of Sterling credit transactions and approximately €700m of Euro based transactions in each case since 2012.
Join AltFi for its third annual Alternative Income Forum, exploring closed-ended funds (investment trusts) specialising in generating an income using alternative assets such as specialist finance, P2P lending, direct lending, asset leasing and more. Hear from the leading investors and fund managers in this rapidly growing market.