Pete Robinson

Leading alternative fixed income manager CIP Asset Management (CIPAM) has launched a new share class of its successful CIPAM Multi-Sector Private Lending Fund, providing the opportunity for wholesale/sophisticated individual investors to access this unique offering.

CIPAM manages over $16bn1 in fixed income, boasting a 15 year long track record managing money for institutional clients under Challenger Investment Partners Limited before rebranding in 2020, expanding the offering to a wider group of investors.

The CIPAM Multi-Sector Private Lending Fund – Class P (Fund) is a floating rate, multi-sector credit strategy focused on private lending opportunities primarily in Australia and New Zealand, which include corporate loans, commercial real estate debt and asset backed securities.

The Fund aims to generate a consistent, high level of income by harvesting the illiquidity premium that exists in private lending markets. By keeping spread duration low and focusing on floating rate loans, the Fund aims to have a low correlation to interest rates and broader equity markets.

The Fund has an investment objective of achieving a superior absolute return of 5% above the Fund’s Bloomberg Ausbond Bank Bill Index benchmark (after fees). The institutional (Class I) version of the Fund  has achieved this target to date with a 1-year return of 8.35% and a annualised return since inception2 of 6.21% as at 31 May  2021.

CIPAM Head of Investment Strategy, Pete Robinson said the manager was pleased to bring such a sophisticated and innovative private lending product to wholesale investors at this interesting time.

“If the current environment persists, we see significant opportunities in domestic private markets, which currently boast very attractive illiquidity premiums. We believe they will continue to outperform the increasingly expensive public markets”.

“What’s unique about us in the marketplace is that we have a track record of managing investments on behalf of some of the most sophisticated institutional investors in Australia and across the world for more than 15 years. We also have one of the largest fixed income asset management teams in Australia, with deep expertise across both public and private credit markets as well as the fiduciary rigour of oversight from an independant credit risk team. That’s unrivalled in Australia within an asset manager and we’re excited to offer that expertise and investment mindset to a broader range of investors.”

“Over the 15 years we’ve advanced well over $10 billion of private credit loans. Our cumulative loss experience on that $10 billion is shy of 50 basis points or less than 5 basis points on an annualised basis. Our low default rate is a reflection of the well established processes that CIPAM have built across our business – led by the investment team and supported by our inhouse legal team and independent risk functions.”

CIPAM’s well established governance framework is key in private lending, ensuring our clients can have confidence that they are being appropriately compensated for the risks in their portfolios,” Robinson said.

The launch of this new share class follows CIPAM’s launch of a retail share class of the CIPAM Credit Income Fund at the end of last year.

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CIPAM was formerly known as Challenger Investment Partners before rebranding earlier this year. Its 22-strong investment team has one of the longest Australian track records in institutional private lending strategies.

The CIPAM Credit Income Fund (Fund) is a floating rate, multi-sector credit strategy which invests mostly in investment grade opportunities. It is unique in the Australian marketplace as it invests in both public and private debt markets, while managing for monthly rather than daily liquidity.

The Fund aims to provide investors with capital stability and stable income generation, accompanied by lower levels of volatility than traditional fixed income strategies, which it achieves by avoiding interest rate or currency risk.

Rated ‘Recommended’ by Zenith, the Fund targets the Bloomberg AusBond Bank Bill Index +3% after fees, and aims to achieve superior absolute returns over the medium to long term.

CIPAM Fixed Income team’s Head of Investment Strategy, Pete Robinson said the credit manager was pleased to bring its sophisticated investment approach to Australian retail investors for the first time.

“We have been managing fixed income investments on behalf of some of Australia’s and the world’s most sophisticated institutional investors for more than 15 years, and we’re excited to offer that expertise and investment mindset to a broader range of investors”.

“Our investment team’s breadth of experience combined with our wide investment lens allows us to exploit market inefficiencies across all sectors in the global credit market”.

“We reduce sensitivity to market risk by building diversified portfolios with low cross-sectoral correlations and relatively short spread duration while seeking to identify attractively priced but hard to access opportunities in less liquid markets. This is not an off-the-shelf-credit fund, it is carefully designed to achieve the best possible returns without compromising on risk,” Mr Robinson said.

“At CIPAM we’re focused on product innovation, strong governance and building long term partnerships with our clients. We have one of the longest track records in Australian private lending markets and our team is uniquely positioned to exploit opportunities across both public and private lending markets. In addition, we offer investors a robust governance framework, including an independent credit risk management team within the Challenger Group. This governance framework is key in private lending markets, ensuring our clients have confidence that they are being appropriately compensated for the risks in their portfolios,” Mr Robinson said.

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