Richard Quin

Bentham Asset Management, one of Australia’s leading specialist global fixed interest and credit investment manager, is pleased to announce that the Bentham Syndicated Loan Fund (“the Fund”) has marked its 20 years of delivering regular income to investors.

Since inception in August 2004, the Fund has produced a total return (after fees) of 6.59% p.a, outperforming the benchmark (Credit Suisse Leveraged Loan Index Hedged to $A) by 0.55% pa. This floating rate Fund has delivered 3.17% more than the Ausbond Bank Bill Index which returned 3.42%. The fund volatility of 7.1% is significantly lower than Australia equity volatility of 13.8%.

The Fund primarily invests in a diversified portfolio of floating rate US and European broadly Syndicated and rated senior secured loans. It is managed by Bentham Asset Management alongside the UBS Credit Investments Group (CIG), one of the largest, well regarded and most experienced providers of non-investment grade credit solutions in the world (managing more than USD 55 billion as at 31 August 2024). The Fund is hedged into Australian Dollars.

“This is another milestone for Bentham and showcases CIG’s expertise in investing in syndicated loans in the global market,” Richard Quin, Bentham’s Principal and Chief Investment Officer, said.

“Our goal across all our funds is to deliver higher income to investors than can generally be achieved in traditional fixed interest and equity markets, and this Fund is a good example of that successful approach,” he added.

“With over two decades of experience (across multiple cycles), our team has consistently demonstrated its disciplined credit expertise as a global credit asset manager. Our long track record across our funds is a testament to our deep understanding of credit markets and our commitment to delivering strong, risk-adjusted returns for our investors.”

The Syndicated Loans Fund provides market liquidity with risk mitigating industry diversity really only available globally. It adds value through loan and security selection and industry rotation, while maintaining a highly diversified portfolio. It invests in more than 350 different rated issuers and distributes income to investors monthly.

The Fund invests in senior secured loans and makes additional investments in secured and unsecured high yield bonds and secured collateralised loan obligations. The preservation of principal and protection against downside risk plays an important role in the investment process. A high level of industry and issuer diversification helps to manage this risk, with the Fund limiting a 2 per cent maximum per issuer (borrower) exposure limit.

“We are pleased that this Fund continues to be able to provide investors with the kind of diversified exposure to the global syndicated loan market that they would be unlikely to achieve on their own,” Quin said.

“Syndicated loans, or senior secured loans, have priority in repayment and are protected from a borrower’s failure to repay the interest or principal by security over the borrower’s assets, but they are not directly accessible to retail investors, which is where an experienced investor like Bentham comes in,” he added.

Loans as an asset class have historically had a low correlation to equities and a low correlation to government bonds.

“An allocation to loans may improve the diversity of a balanced portfolio and has historically improved the risk and return outcome,” noted Quin.

Unlike much of the private debt market, the Fund invests in externally rated securities with external valuations. The Fund is revalued daily with market prices reflecting the market tested values.

The Fund manages more than A$2 billion in assets as at 31 August 2024.

With a minimum investment amount of A$10,000, the Fund provides investors with access to a professionally managed, global portfolio.

The Fund is available on all major investment platforms, with a ‘Recommended’ rating from Zenith and Lonsec.

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