Canadian pension funds broaden into personal credit score

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4 of the most important pension funds in Canada have began to broaden into the personal sector market.

Canada Pension Plan (CPP) Investments, Ontario Lecturers’ Pension Plan (OTPP), Ontario Municipal Staff Retirement System (Omers), and OPTrust collectively handle nearly CAD$1trn (£585bn) in belongings.

All 4 pension funds instructed Reuters that they intend to extend their publicity to non-public credit score, with CPP Investments planning to double its portfolio over the subsequent 5 years.

Omers mentioned it has seen alternatives throughout all credit score markets, together with in personal credit score.

Learn extra: Abrdn sees “sturdy” demand for personal credit score

In the meantime, representatives of OTPP and OPTrust each instructed Reuters that they noticed alternatives to fulfil a funding hole left by banks.

“Non-public credit score is a lovely product proper now, and the structural shift from banks to non-public lenders continues,” mentioned Nick Jansa, OTPP’s government managing director for Europe, the Center East and Africa.

Learn extra: $7.5bn Philadelphia pension fund to make first personal debt allocations

OPTrust mentioned it expects to develop its investments in personal credit score in Europe and the UK, the place larger capital necessities and excessive base charges have seen many banks cut back their lending operations.

Final 12 months, OPTrust made a “sizeable” improve in its credit score publicity from 10 per cent of its belongings in 2022.

“We’re fairly assured they (the companions) have the abilities and skill to navigate that market,” mentioned David Ross, managing director of OPTrust’s capital markets group.

Learn extra: Inarcassa to extend personal debt allocations



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