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Audience

Private placements

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For further information about our investment opportunities in private placements.

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Private placements can be a good option for investors looking for secure, stable, contracted cashflows from companies with strong financial profiles. Private placements can also offer enhanced documentary protections for investors, typically greater than those offered by public bonds.

What are private placements?

Private placements are unlisted corporate securities offered directly to a limited group of institutional investors rather than via public markets. Typical issuers are mid-sized companies with strong financial profiles, which either require funding infrequently and have no public credit rating, or do not wish to raise the scale of financing needed for the public debt markets.

The smaller scale of the market often allows for more bespoke financing, presenting investors with opportunities to invest in a range of currencies and maturities to fit their investment needs.

Why invest in private placements?

Private placement investments offer regular and stable cashflows, so are well suited to long-term institutional investors. They have a limited secondary market, so they are most appropriate for those for whom liquidity is not a primary concern and can adopt a buy and hold strategy. 

Investors in private placements can typically benefit from:  

  • additional yield and better total return than comparable public bonds generated by illiquidity premium and fee income* 
  • enhanced structural protection 
  • diversity of opportunities through exposure to companies not found in bond indices 
  • higher recovery rates than public bonds** 

*Source: M&G data as at September 2016
**Source: Society of Actuaries 2006 and M&G data as at September 2016

Our experience

M&G is one of Europe’s largest investors in private placements and we have invested over £5.8bn* in private placements since we began investing on behalf of Prudential plc, our parent company, in 1997. 

Our dedicated private placement team has over 60 cumulative years of experience in structuring deals. The team also draws on the expertise of our in-house credit team, one of the largest in Europe. 

We are playing an active role in developing and promoting European private placement markets and are able to tap into a wide range of opportunities across the entire credit spectrum. 

*As at 30 September 2016.

Our product range

We run segregated private placement mandates for clients. We hold much of our private placement investment in private debt multi-asset funds.

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