AMP launches alternative debt fund

AMP is launching a new investment solution to provide bespoke access to global private debt investments in developed markets.

AMP said the total volume of institutional assets under management allocated to private debt is estimated to be around US$1.7 trillion globally, of which $200 billion is estimated to be Australian.

The new Alternative Debt Fund will be a standalone strategy that can be accessed by members of AMP's Super Fund invested in the MySuper or Future Directions options range.

The fund will be part of the Diversified Credit sector and will complement AMP's existing range of diversified investments, providing valuable exposure to private markets, AMP said.

AMP will commit $300 million initially into the fund with the assets to be managed through two external managers.

The fund will provide exposure to credit risk transfer by purchasing credit risk notes from issuing banks insuring the first loss on a diversified pool of high-quality loans, providing regulatory capital relief to the banking institution to maintain their relevant Tier 1 capital ratios.

It will also provide exposure to flexible credit solutions with a wide remit to take advantages of opportunities in Special Situations, Distressed Credit, Short-Term and Long-Term opportunistic lending.

AMP said the new fund's allocation will be spearheaded by AMP's private markets team with the implementation to be supported by AMP investment, product and operations teams.

"We're excited to be providing our super fund members with bespoke access to global private debt investments in developed markets. This is a whole of team effort to successfully deliver a unique, new investment solution - one that will help bolster our existing range of diversified investments, providing flexibility and choice for our members," AMP chief investment officer Anna Shelley said.

"By combining credit risk sharing with more of an opportunistic strategy, AMP is paving the way forward for standalone international private debt strategies that can deliver for our members and customers over the long term with valuable exposure to private markets."The new funds also provide complementary exposures to the existing leveraged buyout financing and domestic-based direct credit investments AMP implemented in 2022."