Global credit funds & CLO's
July 2020 | Issue 225
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July 2020 | Issue 225
Canadian pension Imco outlines two-year $6 billion credit plans
Sayed Kadiri headshot
Sayed Kadiri
The Investment Management Corporation of Ontario (Imco) has a range of credit strategies in its sights as it seeks to deploy $6 billion in the next two years as part of the build out of a global credit platform, according to officials at the company.
The Canadian pension giant kicked off this initiative with a $250 million allocation to a $1.75 billion credit dislocation fund launched by Apollo Global Management in May — Apollo Accord Fund III Series B. Dislocation funds of this nature are likely to be high on its agenda, but Imco is taking an open-minded approach.
“Historically, the 12 months after a dislocation is the best time to invest in distressed debt,” says Jennifer Hartviksen, who leads Imco’s global credit business. “But this is just one area we are looking at. Imco has the ability to underwrite transactions, which means we have the scale to take on direct lending and other types of off-balance sheet financing.”
Managing director Hartviksen says that the credit expansion spans public and private credit, and across the liquidity spectrum, from investment grade credit through corporate loans and structured credit to niche products, such as financing royalty streams.
Imco has about $2 billion of legacy credit investments through its fixed income unit. But this is being rehoused in a global credit division, which Imco is looking to grow to roughly $8 billion.
The pension fund’s investment in the Apollo credit fund underlines how quickly it can put money to work. “We had been in contact with Apollo regarding a number of opportunities. When it became clear there were dislocated opportunities in credit, we were able to very quickly deploy $250 million to the Accord fund, within about four weeks from start to close,” says Hartviksen.
In June, Creditflux reported on distressed debt being the most popular strategy targeted by pension funds. Managers including Beach Point, CarVal, Charlesbank, Davidson Kempner, Oaktree and Oak Hill have won allocations. Direct lending has been the next most popular, with CrayHill, HarbourVest, MGG and SJC among the beneficiaries.
The State Universities Retirement System, based in Illinois, is also moving into this market for the first time.
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“We were able to very quickly deploy $250 million to the Accord fund”
Jennifer Hartviksen, Managing director | Investment Management Corporation of Ontario