BlackRock has announced the launch of the BlackRock Senior Securitised Fund (BSSF), its new flagship Securitised Fund, in the existing BlackRock Specialist Strategies Fund range.
The firm writes that BSSF is designed to meet the strong demand for securitised assets from both institutional and wealth clients seeking access to diversify their fixed income exposures. Clients have demonstrated a desire for the diversification benefits, limited interest rate risk and the yield premium securitised assets typically offer versus corporate credit.
The fund utilises BlackRock’s experience across global Securitised assets, to identify unique and attractive investment opportunities. BlackRock manages over USD120 billion of securitised assets globally on the platform.
Kate Galustian, Lead Portfolio Manager, BlackRock Senior Securitised Fund and Head of European ABS, says: “The BlackRock Senior Securitised Fund leverages BlackRock’s experience in the Securitised market to identify unique and attractive investment opportunities that have the potential to offer clients attractive risk-adjusted returns throughout the cycle. The fund seeks to maximise total return by investing in high grade, predominately AAA, securitised assets, in a manner consistent with the principles of ESG-focused investing.”
Anne Parthiot-Mons, Head of BlackRock’s EMEA Institutional Client Business and Co-Head of BlackRock’s Global Consultant Relations Business, says: “In close collaboration with BlackRock’s global investment teams, clients, and investment consultants, we are delighted to offer our Securitised Credit capabilities in the shape of a pooled fund. The fund is designed to meet the growing international demand across institutional and wealth clients for securitised assets and the diversification benefits that they offer for clients’ fixed income exposures.”
Ajith Balan Nair, Head of Investment Research, ISIO, says: “We like high quality ABS as an asset class for the yield premium versus corporate credit, diversification benefits from exposure to consumer risk and the floating rate nature. More broadly, we see ABS as a versatile asset class that can play a wide range of roles in client portfolios ranging from allocations in collateral buckets to growth portfolios. BlackRock’s Senior Securitised fund is a good example of our focus, and we are happy to have engaged with BlackRock from the initial design stage.”
Nick Cooney, Senior Investment Consultant & Partner, Lane Clark & Peacock, says: “Securitised debt continues to be a core asset for institutional investors, so it is encouraging to see BlackRock embrace feedback and build a solution which closes a gap in its fund range. This development is particularly timely given the current strong demand from those seeking liquid investment strategies that offer favourable risk-reward characteristics.”
BSSF is actively managed and has an unconstrained investment style (it will not take a benchmark index into account when selecting the Fund’s investments) the three month SONIA compounded in arrears should be used by investors to compare the performance of the fund. It is an Irish domiciled Alternative Investment Fund and will invest in both primary and secondary offerings of securitised assets. The Fund adopts the following credit rating, geographical and sector constraints when managing investment positions:
Credit rating constraints: BSSF is focused on the higher quality portion of the capital structure – with a minimum exposure of 75 per cent to AAA assets and a minimum rating of AA-.
Geographical constraints: BSSF is predominately focused on European and UK assets but can also invest up to 25 per cent in the US (and other regions).
Sector constraints: BSSF will have a minimum exposure of 65 per cent to ABS and a maximum exposure of 35 per cent to CLOs.
The fund will be classified under the EU’s Sustainable Finance Disclosure Regulation (SFDR) as Article 8, with ESG factors acting as a core component of the team’s securitisation analysis, and with a skew towards issuance with positive social and / or environmental impact.