Specialty finance investment in action

24/08/2018

Higher regulatory capital requirements on banks post-financial crisis have created an opportunity for institutional investors to acquire pools of performing consumer loans.

  • These consumer loan portfolios are highly diversified and can include residential mortgages, credit cards, auto loans, student loans and unsecured consumer loans
  • They can offer attractive risk-adjusted returns and complement existing private debt investments for institutions
  • We illustrate the investment process through recent transactions for the M&G Specialty Finance Fund (the ‘Fund’), which was launched in early 2018

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The value of investments will fluctuate, which will cause prices to fall as well as rise and investors may not get back the original amount they invested.