Zurich Insurance Group has announced the launch of its first European Long-Term Investment Fund (ELTIF 2.01), aimed at providing individual investors and life insurance customers with access to opportunities in the asset class of private debt, “traditionally only available to professional investors.”
The Fund is a sub-fund of Zurich Global Private Asset Solutions SICAV S.A. and it is intended to be the first in “a series of private market solutions, through which Zurich customers can access the performance and diversification benefits of these attractive asset classes.”
The Fund will provide eligible investors “with access to a well-diversified portfolio of direct loans to leading European mid-market companies.”
The portfolio will be managed by Pemberton Asset Management, an independent private credit manager.
The Fund portfolio will largely follow Zurich’s investment approach and guidelines “with Zurich entities investing into the same strategy and in the same loans as the Fund.”
After the initial ramp-up period, the Fund will “offer monthly liquidity subject to certain conditions.”
The launch of Zurich Private Debt ELTIF marks “an important milestone. It reflects Zurich’s ambition to open up our private market expertise to our customers through innovative, high-quality solutions managed by leading asset managers.”
The introduction of private asset solutions aims to “increase the attractiveness of Zurich’s Life insurance products, enhance investment outcomes for our customers and offer the opportunity to invest like Zurich, by following our own proven investment principles.”
Stephan van Vliet, Group Chief Investment Officer:
“Zurich has been investing in private debt for its own account for over 15 years and has a deep understanding of the asset class. The Group has a long and trusted relationship with Pemberton, which is one of its largest and most successful asset managers. With increasing demand for flexible, tailored financing solutions amidst a historic rise in interest rates, private debt investments offer notable opportunities for investors. Zurich Private Debt ELTIF aims to capture these opportunities for a wider customer base, in an asset class that is traditionally only available to professional investors.”
As noted in the update:
“Private credit has continually grown over recent years. Attractive risk-adjusted returns, portfolio diversification, and lower volatility are some of the key benefits of the asset class, which is appealing to an ever-broader number of investors. We are pleased to expand our partnership with Zurich and offer their customers access to the benefits of this exciting asset class.”
Symon Drake-Brockman, Managing Partner at Pemberton:
“The Fund benefits from the new ELTIF 2.0 regime, allowing eligible investors more flexible access to private assets. The Fund is domiciled in Luxembourg and will be offered to Zurich’s eligible investors and life insurance customers in Europe in 2024, providing an opportunity to diversify investment portfolios and gain exposure to private markets. The Fund is actively managed and is not managed in reference to a benchmark. As with all investments, investing in this product may entail risks such as credit, liquidity, valuation, currency among others. Interested eligible investors should consult the prospectus for details on the risks associated with investments in the Fund.”
An ELTIF, or European Long-Term Investment Fund, is “an innovative type of investment vehicle designed to channel funds into real economy.”
It offers investors the opportunity to “access illiquid assets classes and are often structured to provide investors with liquidity options, making them an attractive investment opportunity for both professional and individual investors. As of January 2024, the new ELTIF 2.0 regime entered into force making these vehicles more accessible and flexible for eligible investors.”
The direct investment in the Fund concerns “the acquisition of shares in the Fund, and not in a given underlying asset, as these are only the underlying assets owned by the Fund.”