XA Investment Managers (AXA IM) has raised GBP1.1 billion for its multi-client Long Term Credit (LTC) fund, since launch in 2019, which is hosted on the Asset Management Exchange (AMX), an institutional investment platform.
This brings the total asset under management for AXA IM’s Buy & Maintain team in London to GBP18.2 billion.
The LTC fund is a well-diversified, benchmark-agnostic, long-dated credit portfolio that can deliver predictable cash flows for pension schemes. The Buy & Maintain approach drastically reduces transaction costs, and more importantly prevents schemes becoming a forced seller during a market sell off.
Our main objective is to avoid the impairment of our clients’ assets and we do this by considering both traditional financial metrics and also extra-financial metrics such as ESG as a robust and material risk-mitigation technique. ESG factors are fully integrated within the investment process of the LTC fund and in all Buy & Maintain strategies managed by AXA IM.
The influx of assets reflects a buoyant market for cashflow delivery (CDI) strategies in the UK with AXA IM predicting the CDI market could develop into one worth GBP500 billion over the coming years.
Sebastien Proffit, Head of Portfolio Solutions, Fixed Income at AXA Investment Managers, says: “We continue to see demand from pension schemes that want to manage their cashflow as they reach maturity. In 2020, AXA IM has partnered with broad range of schemes to invest GBP6.2 billion in CDI strategies and continue to expand and improve our offering to remain the partner-of-choice for UK pension schemes. We believe our strong ESG credentials, our focus on high quality assets and resilience to market risk provides a natural de-risking solution for a range of pension scheme endgame options”
Oliver Jaegemann, CEO of AMX, says: “We are very pleased at the success of AXA IM’s Long Term Credit Fund on the AMX platform. It highlights the value many pension schemes are seeing in Cashflow Driven Investment strategies, which help to avoid forced sales when liquidity needs occur during a period of market volatility, and the ‘buy and maintain’ approach on AMX leads to significantly lower overall costs and easier implementation for investors.”
