Brunel launches Multi Asset Credit fund

Brunel Pension Partnership Limited (Brunel), one of eight pooled Local Government Pension Scheme funds in the UK, has launched a new Multi-Asset Credit fund.

Brunel’s clients have committed approximately GBP2.1 billion of funds to the Multi Asset Credit sub-fund, which will be spread across three separate mandates.

“The new fund gives our clients and their members access to sub-Investment Grade credit across a range of sub-classes,” says David Cox, Head of Listed Markets at Brunel. “After a rigorous search and analysis process, we identified three managers who displayed the investment expertise and Responsible Investment acumen we were looking for – as well as providing a diversity of styles.”

The fund is split between three separate sub-funds:

60 per cent: Neuberger Berman Brunel Multi Asset Credit Fund (Irish QIAIF)
20 per cent: Oaktree Brunel Global Credit Fund (Luxembourg SICAV)
20 per cent: CQS Brunel Multi Asset Credit Fund (Irish QIAIF)
 
The portfolio will invest in a variety of specialist bond sectors, such as high yield corporate bonds, bank loans, asset-backed securities and emerging market debt. It has been designed to exposure to range of more specialised, higher-yielding bond sectors which collectively provide a diversifying, moderately high-return portfolio. Brunel has spread the portfolio between managers with diverse but complementary approaches.

“The portfolio is very different from our other portfolio offerings, enabling our clients to reduce risk while still achieving reasonable returns through the use of diversified credit,” says Daniel Spencer, Senior Investment Officer, Brunel.

Aligning with the ambitions expressed in Brunel’s Climate Change Policy was a fundamental theme throughout the manager selection process.

“Crucially, it aligns with our Climate Change Policy. During the interview process, we only considered managers who showed awareness of whether companies are aligned with the Paris Agreement. We also questioned them closely to ensure they knew where carbon data was weak in specific bond sub-sectors, and how they could work towards meeting Paris alignment despite these issues,” says Spencer.

Soraya Chabarek, Co-CEO of CQS, says: “We are delighted to have been appointed by the Brunel Pension Partnership as part of their [MAC] fund. The thoroughness and detail of the selection process truly highlighted the shared vision and cultural similarities between Brunel and CQS to achieve responsible investment within multi asset credit markets. This is a fantastic achievement for CQS and it is an honour to deepen our partnership within the UK LGPS community. We are excited by the opportunities ahead and look forward to a productive relationship with Brunel as they look to achieve their long term investment outcomes and objectives.”
 
Bruce Karsh, Portfolio Manager and Chief Investment Officer at Oaktree Capital Management LP, says: “We are honoured that Brunel Pension Partnership has selected us to co-manage the Multi-Asset Credit Fund. Our Global Credit strategy uses a fundamental, value-based investment approach and we dynamically allocate among diverse credit strategies globally integrating ESG factors at every stage in our process. We look forward to partnering with Brunel in seeking to achieve our shared goal of generating attractive risk-adjusted returns while investing for a more sustainable future.”
 
Ed Jones, Head of UK Institutional Client Business at Neuberger Berman, says: “We’re delighted to help Brunel’s LGPS clients achieve their investment goals by offering the full breadth of Neuberger Berman’s fixed income capabilities in a single multi-asset credit fund. With the importance that Brunel places on ESG and the climate transition, we’re honoured to also be recognised for our commitment to responsible investment and ability to seamlessly integrate climate risk considerations across fixed income sectors.”