MUFG's AlbaCore eyes alternative investment growth in Japan

Tikehau Capital SCA

12/12/2023 03:29

By Makiko Yamazaki
       TOKYO, Dec 12 (Reuters) - AlbaCore Capital, a
London-based private credit firm bought by Mitsubishi UFJ
Financial Group  8306.T , sees growth potential in Japan for
alternative investments which are still underweight in Japanese
institutional investors' portfolios. 
    "Japan has historically had a very small allocation to
alternatives," AlbaCore's Chief Investment Officer David Allen
told Reuters, referring to non-traditional assets such as
private debt, private equity, and real estate. "There probably
could be continued growth in this market."
    Mitsubishi UFJ, Japan's largest banking group, last month
bought 75% of AlbaCore through its Australian investment
management unit First Sentier Investors to diversify the range
of investment capabilities.
    AlbaCore, with $9.4 billion in assets under management, has
strengths in private credit, collateralised loan obligations and
structured credit in Europe.
    Private credit, provided by a lender other than a bank, has
flourished since the 2008 financial crisis that forced
capital-constrained banks to cut lending.
    Allen said AlbaCore has now been expanding its business for
first lien senior secured debt, with the highest-ranking
security in a company's capital structure, as high interest
rates allow lenders to make high returns even on such debt with
more protection.
    Junichiro Taguchi, an executive at Mitsubishi UFJ's asset
management business division, said in the same interview that
senior debt products, which carry lower risks with higher
priority for repayment, would be more easily accepted by
Japanese investors.
    Japan's large pool of institutional investors, including
some of the world's biggest pension funds, has been attracting
global private debt companies. Tikehau Capital  TKOO.PA  and
Hayfin Capital Management are among those that announced
expansion plans in Japan in recent months.
    

 (Reporting by Makiko Yamazaki; Editing by Kim Coghill)
 ((Makiko.Yamazaki@thomsonreuters.com; +81-3-4563-2805;))