Metrics Credit Partners hires nine brokers for $500m raising

by Sarah Thompson, Anthony Macdonald, Joyce Moullakis

As bank hybrids cop a whacking from outgoing ASIC chairman Greg Medcraft, a Sydney-based fund manager has a new fixed income idea for retail and institutional investors.

Street Talk can reveal National Australia Bank-backed Metrics Credit Partners is set to launch a new ASX-listed investment trust, which would invest in a wide portfolio of corporate loans.

Metrics Credit Partners is tipped to target up to a $500 million raising for its new fund, dubbed MCP Master Income Trust, in a deal overseen by Grant Samuel and arranged by CBA’s Commonwealth Securities Ltd. 

Sources said Metrics Credit Partners planned to lodge an offer document with Medcraft’s Australian Securities and Investments Commission next week, with marketing scheduled for August and a listing in September. 

The listed trust will target a net return of 325 basis points above the bank bill swap rate, equating to 4.75 per cent at current interest rate levels and more should official interest rates increase by mid next year as the market expects. 

The raising, which has already attracted cornerstone bids, will be pitched as the only one of its kind in Australia, giving investors to access to the sort of fixed income portfolio of diversified corporate loans which has only previously been available to banks. 

Investors in the fund would get immediate exposure to more than 50 corporate borrowers from day one, sources said. 

It’s understood nine brokers are lined up to market the deal to potential investors. The syndicate is headed by CommSec and includes Morgans Financial, Wilsons Advisory, Bell Potter Securities, FinClear Execution, Ord Minnett, Shaw and Partners, SMBC Nikko Capital Markets and Taylor Collison. 

Metrics Credit Partners is expected to target a $300 million to $500 million raising, with a $100 million minimum. 

The fixed income manager was set up in 2011 and is run by Andrew Lockhart, Graham McNamara, Andrew Tremain and Justin Hynes. While the manager is backed by NAB, it is held at arm’s length and operates separately from the big Australian bank. 

Metrics is also part of the Pinnacle Investment Management stable, alongside the likes of Hyperion Asset Management, Plato Investment Management and Palisade Investment Partners. 

The raising comes as investment managers use listed investment trust and listed investment company structures to tap the self-managed superannuation pool of funds, and shore-up their own funding sources. 

It also comes after Medcraft said hybrid securities – which would make up the fixed income portion of plenty of superannuation portfolios – were a “ridiculous” product for retail investors.

Ref: afr.com | 20 July, 2017

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