Railpen, the UK’s rail workers’ pension fund with over £34bn (€40.5bn) in assets, has awarded a securitised credit mandate to Neuberger Berman.
The move builds on an existing strategic partnership between the two firms and will provide Railpen with additional exposure to liquid securitised credit, it was announced in a statement.
The mandate, structured as a Qualifying Investor Alternative Investment Fund (QIAIF) within the Neuberger Berman Investment Funds II plc umbrella, primarily invests in securitised debt securities – including collateralised loan obligations (CLOs), asset-backed securities (ABS) commercial mortgage-backed securities (CMBS) and mortgage-backed securities (RMBS).
The portfolio will be co-managed by Neuberger Berman’s Joe Lynch, senior portfolio manager for multi-sector fixed income, Pim van Schie, senior portfolio manager for structured credit, and Jose Pluto, portfolio manager for securitised products. The asset manager handles over $50bn in securitised credit globally.
Railpen, which caters for over 350,000 members, is “committed to investing securely and sustainably”, according to the statement. “The continued partnership with Neuberger reinforces Railpen’s commitment to securing its members’ future.”
The mandate adds to an existing partnership between Railpen and Neuberger, which saw a £2bn multi-asset credit strategy launch in July 2023. The additional allocation to securitised credit will increase this partnership to above £3bn.
Craig Heron, director of public markets at Railpen, said: “Neuberger’s deep expertise in credit helps Railpen to deliver long-term value for our members. In today’s complex investment environment, it is essential to work with partners who not only bring strong technical capabilities but also understand the evolving needs of institutional investors.”
Ed Jones, head of UK institutional client business at Neuberger Berman, added: “This extension of our relationship with Railpen is a testament to the successful collaboration we have built, both operationally and through our investment approach.”
The pension fund industry has seen recent interest in securitised assets, with the €20.4bn French pension reserve fund Fonds de Réserve pour les Retraites (FRR) announcing a €200m investment in investment grade securitised assets a couple of weeks ago.
Aimed at diversifying its portfolio and supporting the project of a single capital market in the EU, FRR said the targeted assets would consist of portfolios of loans to the European real economy, especially residential mortgage loans, consumer credit, and business loans, including for SMEs.
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