The Swiss Life Loan Fund (LUX) S.A., SICAV-SIF - ESG Infrastructure Debt, initially managed exclusively on behalf of the insurance companies of the Swiss Life Group, is now open to professional institutional investors. Roughly twenty investments in ten sectors across nine countries have already been realised by the fund. The fund aims to raise a total of over EUR 2.5 billion in capital.
Slightly more than a year after establishing its infrastructure debt portfolio management team, Swiss Life Asset Managers is opening its investment platform to third-party clients.
The “Swiss Life Loan Fund (LUX) S.A., SICAV-SIF - ESG Infrastructure Debt” which until now has been managed exclusively on behalf of the Swiss Life Group entities, is therefore available to institutional and professional investors.
The existing portfolio is invested in euro-denominated senior infrastructure debt of entities domiciled in OECD countries with a target of achieving an investment grade rating. Established with a long-term horizon, the investment strategy is based on a buy-and-hold approach – holding assets until full repayment – targeting brownfield and greenfield infrastructure projects. Investor interest is bolstered by the fact that the fund is operational and already largely invested.
The fund already participated in around 20 transactions in ten business sectors, including telecoms, transportation, social accommodation, industrial storage, and renewable energies, across nine European countries, illustrating the focus on asset diversification.
“In line with our collaborative and sustainable investment philosophy, we wanted to open this expertise to investors. There is a natural alignment of interests between our clients, especially life insurers and pension funds, and the Swiss Life Group, which is invested in this asset class over the long term,” says Daniel Berner, Head Securities at Swiss Life Asset Managers.
“Infrastructure debt is a real asset class being attractive not only because of the prospects for robust and regular returns, but also because of favourable treatment under Solvency II. Indeed, qualified infrastructure debt enables to save more than a third of the ‘cost’ in SCR (solvency capital requirement) than a traditional unrated bond. The asset class is suited for institutions with medium to long-term liabilities,” adds Denis Lehman, Chief Investment Officer, Swiss Life Asset Managers France.
A target aim of EUR 2.5 billion in capital
The “Swiss Life Loan Fund (LUX) S.A., SICAV-SIF - ESG Infrastructure Debt” aims to raise a total of over EUR 2.5 billion in capital. As of 30 April 2022, EUR 1.5 billion had been committed by the Swiss Life Group, with EUR 700 million already deployed in investment transactions. “Through our investments in infrastructure debt, we intend to contribute actively to the sustainable financing of Europe's real economy,” says Stéphane Rainard, Head Infrastructure Debt, Swiss Life Asset Managers.
In line with Swiss Life Asset Managers responsible investment approach, a non-financial due diligence is an integral part of the investment and management processes of the fund, which will be classified as an Article 8 fund under the Sustainable Finance Disclosure Regulation (SFDR). The team concluded several financing transactions with borrowers whose terms, including a reduced cost of borrowing, were linked to compliance with specific ESG requirements as defined by Swiss Life Asset Managers.
The infrastructure debt team at Swiss Life Asset Managers has on average 20 years of experience in the asset class universe with a wide variety of profiles. Its in-depth knowledge of this ecosystem, its responsiveness, and its long-standing relationships with the various stakeholders (shareholders, banks, advisors, public institutions, operators, etc.) offer the team not only direct access to investment opportunities, but also a high capacity to timely target and conclude financing transactions. “As an integral part of the overall Swiss Life Asset Managers’ Credit organisation the infrastructure debt team can tap into a deep internal research pool with strong sector expertise ensuring thorough and comprehensive assessments”, says Daniel Holtz, Head Credit, Swiss Life Asset Managers.