Securitised Credit

Alternative credit opportunities

Exposure to secured direct lending and securitised loans

With interest rates hovering at low levels and bond yields compressed, investors need to think outside the box in their search for returns. Private secured direct lending and securitised credit strategies can provide an alternative source of income as well as capital growth.

Securitisation involves bundling the cash flows from various loans, such as mortgages, car loans and credit card payments, into bonds known as asset-backed securities. A portfolio allocation to private and public loans can help investors achieve their desired risk-return profile while addressing liquidity needs, if required.

New sources of income

Schroders secured direct lending and securitised credit strategies seek to generate income and capital growth throughout the credit cycle with a research-oriented, value-driven approach to investing1. Our direct lending targets middle markets in the US that are underserved by traditional lenders due to tighter regulations. The largest securitisation sectors are mortgage-backed securities and asset-backed securities.

By investing in securitised credit, investors gain access to an alternative asset class that offers exposure to consumer, commercial and corporate loans, as well as other forms of credit not available on public markets.

1There is no guarantee that objectives will be met.

Other Private Asset opportunities at Schroders

Risk warnings
Past performance is not a guide to future performance and may not be repeated.
The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.
Alternatives can be more volatile than shares and bonds, and it may be harder to cash in the investment at short notice. Private Assets offer less liquidity than publicly listed securities. Please note: this is not a complete list of risks but rather an overview of some risks.

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