Structured Finance

M&G has actively managed Structured Finance as a standalone asset class within Private Markets since the late 1990s and manages c.€18bn of ABS and Structured Finance firm wide as at 31 December 2024. M&G has a long-standing and significant presence in the European Structured Finance markets and is one of the largest ABS and Fixed Income investors across Europe today. We’ve been investing in and developing platform businesses for a number of years, to help these platforms grow and scale asset origination.

The M&G Structured Finance team manages over €9.7bn* across a range of dedicated Structured Finance investment strategies covering the full breadth and depth of Europe’s securitisation markets and beyond. Our asset sourcing and origination focus spans the key market verticals of:

Asset-backed Securities (ABS)
Collateralised Loan Obligations (CLOs)
Significant Risk Transfer (SRT) transactions
Specialty Finance / private Asset-backed finance (ABF)
Platform Strategies

The breadth of our offering caters for clients with a wide range of risk, return and liquidity profiles. We run dedicated strategies and mandates ranging from daily traded senior AAA ABS, investment grade ABS, residential mortgage whole loans through to high yield-focused strategies that focus on harder-to-access Significant Risk Transfer (SRT) and Consumer Specialty Finance transactions. Investments are typically backed by real economy consumer and corporate lending and credit assets that offer diversified exposure relative to traditional asset classes and an ability to access complexity premiums.

We are differentiated by our experience, depth of resources and investment process. We believe we have unrivalled dedicated European Structured Finance expertise and proprietary systems built over three decades of investing in the market.

*Dedicated Structured Finance Funds and mandates excluding undrawn capital commitments and Asset Equity AUM, as at 31 December 2024.
Not all products/strategies may be available or registered for sale in all jurisdictions.

Discover our capabilities

Our capabilities

Investment Grade Structured Credit

Senior ABS

Our strategy focuses on predominantly senior, AAA-rated ABS and CLO opportunities that generate predictable and defensible short-dated cashflows. These can offer attractive risk-return profiles relative to equivalent-rated traditional corporate bonds and daily liquidity.

Investment grade ABS

Our strategies invest in a broad range of investment grade ABS largely within the European Structured Credit universe, including high-quality consumer-backed securities (RMBS, Consumer ABS) and CLOs. These strategies target attractive risk-returns and can offer compelling diversification to client portfolios. These are open-ended vehicles catering to different liquidity needs by offering either daily or monthly liquidity terms.

Investment grade mezzanine ‘BBB’ ABS

Our strategies focus on investing in diversified BBB-rated, mezzanine opportunities largely within the European Structured Credit universe and target value in credits which we believe offer an attractive structure or risk-adjusted return profile. These are open-ended vehicles offering monthly liquidity terms.

Mortgage Income and Consumer Income (whole loans)

Our strategies invest in residential mortgage loan or consumer loan receivables focusing on stable income generation and capital preservation. We utilise a unique partnership model through forward flows, financing new loan origination or acquiring seasoned loan pools on a whole loan basis. These are ‘evergreen’ structures that offer limited liquidity to investors and semi-annual income distributions – with dedicated UK and pan-European exposures available.

Investment grade CLOs

We offer clients the option to invest in dedicated mandates focusing on investment grade and typically AAA-rated tranches of predominantly European CLOs.

High Yield Structured Credit

High Yield (“Best Opportunities”)

A High Yield Structured Credit strategy launched in May 2008 that invests across the public and private structured credit asset spectrum, by taking a multi-asset approach to portfolio allocation based on value and bottom-up fundamental credit analysis. These strategies primarily invest in the mezzanine and junior debt tranches of: CLOs (debt, equity, warehouse), Consumer ABS, SRTs, Consumer Specialty Finance and Corporate Specialty Finance.

This is an evergreen proposition featuring monthly dealing terms with limited liquidity available. We also run a number of bespoke mandates under the Best Opportunities strategy for clients looking for tailored asset allocations and liquidity terms.

Significant Risk Transfer

M&G has been investing in the Significant Risk Transfer (SRT) market since its inception in Europe in 2008. We run dedicated strategies investing in the first and second-loss tranches of synthetic SRT transactions, seeking attractive risk-adjusted IRRs and cash multiples. We source opportunities across a global opportunity set but with a bias towards Europe given our preference for SRT transactions that offer exposure to the core lending assets from top-tier banks in core jurisdictions. These typically offer the strongest creditor protections in asset types where M&G already has existing in-house expertise.

Specialty Finance

Our dedicated strategies invest predominantly in residual and lower mezzanine securities / notes secured by granular pools of assets (especially receivables) – primarily from the world of consumer finance including residential mortgages and consumer loans. They primarily focus on European opportunities given higher barriers to entry and significant growth potential of the asset class. We source investments from both banks and non-bank, specialty lenders, including direct, bilateral origination as well as sourcing in primary and secondary securitisation markets. These strategies are typically closed ended in nature, potentially offering low to mid teen net IRRs and attractive cash multiples.

Platform Strategies

The strategy has been run since 2018, deploying capital on behalf of our internal client, by financing platform businesses across several strategies and geographies. Our investment in platforms leverages three robust internal capabilities: Asset-Backed Finance, early-stage Private Equity, and Fund investments and co-investments.

Once established, these specialised platforms offer reliable access to diversified and esoteric assets including financial assets, royalties, receivables that generate recurring, typically contractual, cashflows and hard, physical assets (e.g. aircraft, rolling stock auto fleets) – helping to scale investments and expand platforms.

We see substantial growth opportunities within the existing GPs we have established, as well as through the creation of new platforms in different sectors.

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. The views expressed in this webpage should not be taken as a recommendation, advice or forecast.

Return to private markets capabilities

Latest insights

For institutional investors only. Not for onward distribution to any other type of client. No other persons should rely on the information contained on this website.