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Manulife Investment Management Launches
Manulife Private Credit Plus Strategy in Singapore

  • Alternative credit solution aims to provide income and, to a lesser extent, capital appreciation 

Singapore – Manulife Investment Management announced today the launch of Manulife Private Credit Plus Strategy (the ‘Strategy’) in Singapore, a diversified private credit fund-of-fund solution that seeks income and, to a lesser extent, capital appreciation by investing in middle market companies alongside select complementary, performance-enhancing credit exposures.

The Manulife Private Credit Plus Strategy is a semi-liquid strategy that invests in U.S middle market senior secured loans sourced across Manulife Investment Management’s global Private Equity and Credit Platform and enhanced through a diverse range of asset-based lending (ABL) sourced through the strategy’s third-party manager, Marathon Asset Management.

HuiJian Koh, Chief Executive Officer, Manulife Investment Management Singapore said, “We are excited to bring another innovative investment strategy to investors in Singapore in a timely manner, as demand for alternative sources of income continues to rise amid the higher for longer rate environment and continued market uncertainty. Manulife Private Credit Plus Strategy was purposely-built to be a semi-liquid strategy encompassing a diverse range of income-generating assets, giving investors a more flexible access to liquidity.”

Private credit has historically provided investors with income and diversification benefits through an attractive combination of differentiated yield, floating rate returns, and the potential for a high level of asset-based principal protection with low volatility1. Generally, private credit has also outperformed its public counterparts in rising rates and stable environments and has historically minimized drawdown effects during recessions2.

HuiJian added: “The number of publicly traded companies have been  on a steady decline in recent years, and more private companies require debt financing to fund their growth. Banks have traditionally played this role, but since the Global Financial Crisis, non-bank lenders have looked to fill the void. It is expected that private debt assets under management will grow from US$1.4 trillion in 2022 to US$2.7 trillion in 20273. With such exponential growth in opportunities, the market is saturated with many private credit strategies coming to market. This makes product differentiation key to providing value and diversification to investors already having existing exposure in private credit.”

The Manulife Private Credit Plus Strategy is a differentiated alternative credit solution that takes a multi-strategy approach:

  1. Differentiated exposure: The Strategy aims to invest in US middle market senior loans which represent one of the largest growing sectors in the US economy, and we believe assets-based lending is an underrepresented exposure in most portfolios;
  2. Sponsor investment: Manulife Financial Corporation, Manulife Investment Management’s parent company, has committed up to US$100 million into the Strategy;
  3. Capital will be put to work quickly: The Strategy was launched with a seeded portfolio of loans, meaning it can build a track record quickly and investors may see near term distribution4;
  4. Robust deal flow: The Senior Loans Team at Manulife Investment Management maintains a healthy deal flow by working with various private markets firms to ensure a wealth of potential deal options and investment opportunities; and
  5. Leverages a strategic third-party manager: Marathon Asset Management has a track record of more than 24 years in ABL strategies.

A key feature of Manulife Private Credit Plus Strategy is ABL exposure which is a sector of private credit that comprises loans backed by hard and financial assets. Stable small and mid-sized enterprises with physical assets of value rely on ABL to raise funds for their operations, and large firms also turn to this type of lending to cover short-term cash needs. In addition, ABL offers access to a wide range of sectors, such as healthcare, transportation, consumer, real estate, that provide robust, predictable cash flows with income, and diversification of risk premiums. It also has lower correlation to public equity markets, and offers the highest recovery rates, lowest default rates and volatility compared to high yield bonds, bank syndicated loans and direct lending5. The global ABL market size is approximately US$3 trillion6, representing a vast investment universe.

HuiJian further stated: “We recognised ABL as a relatively untapped segment with substantial demand for loan facilities. Currently, the market features a limited number of managers equipped to offer financing solutions to these enterprises. We view asset-based lending as a distinct niche within the broader credit sector, requiring specialized expertise.”


1 Note: Morningstar Direct, as of September 30 2023. Volatility is measured using standard deviation. All of the quarterly standard deviations are then annualized. Indices. “Private Credit” is represented by the Cliffwater Direct Lending Index. “Leveraged Loans” is represented by the Morningstar LSTA US Leveraged Loan Index. “High Yield Bonds” is represented by the Bloomberg US High Yield Index. “Investment Grade Bonds” is represented by the Bloomberg US Aggregate Bond Index. Asset Based lending returns and volatility are hypothetical in nature, based on an analysis of historical information including historical markets returns and prior returns of investments, and is shown for illustrative, informational purposes only. Past performance does not guarantee future results

2 Source: Cliffwater Direct Lending Index, Credit Suisse Leveraged Loan Index, ICE BofA High Yield Index, and Bloomberg U.S. Corporate Bond Index. Represents calendar year performance. Past performance does not guarantee future results.

3 Source: Preqin Forecasts, as of September 2023.

4 Note: Distribution is not guaranteed and at the management’s discretion.

5 Source: John Hancock Investment Management, as of December 2022. Most recent data available. Diversification or asset allocation does not guarantee a profit nor protect against loss in any market and does not eliminate the risk of loss. Mortgage Bank Association, BBG Real Estate Services, Polaris Market Research, Urban Institute, Goldman Sachs Research, Federal Reserve Bank of New York, Bourne Partners, Deloitte, Bloomberg, Stifel Debt Transaction Database, Petrofin, and Marathon Asset Management, LP, October 2023. Estimate excludes corporate asset-based lending. Comparisons are based on the historical performance

6 John Hancock Investment Management, as of December 2023.