LCIV launches alternative credit fund

London CIV has launched its alternative credit fund with three seed investors and initial assets of £398 million.

The fund seeks a return of the Sterling Overnight Index Average interest rate (SONIA) +4.5%, net of fees, which it expects to achieve through investments in securitised assets, loans, high yield corporate bonds, and convertible bonds.

It will also invest in investment grade corporate and government bonds and will access exposure to these assets either indirectly or directly.

Indirect exposure will come through investing solely in the CQS Credit Multi-Asset Fund, an alternative investment fund, authorised by the Central Bank of Ireland.

LCIV has appointed CQS to deliver stable returns while optimising yield within the sub-investment grade credit market, focusing on floating interest rate credit instruments within the senior secured loans market and asset backed securities.

CQS has been working on improving its environmental, social and governance (ESG) processes and the underlying CQS strategy has been classified as Article 8 under the Sustainable Financial Disclosure Regulation (SFDR), which means it promotes ESG characteristics.

CQS has also signed up to the Net Zero Asset Managers’ Initiative and is in the process of setting interim targets to achieve net zero by 2050.