Schroders today announces the launch of Schroders Capital Semi Liquid High Income Credit, an actively managed ELTIF that offers investors access to a flexible, diversified corporate credit strategy that invests selectively from across a broad spectrum of public and private corporate credit.

This innovative fund enables clients to access a strategy that allocates dynamically between public market high yield bonds, syndicated loans and private direct lending corporate credit, in a single actively managed portfolio.

The fund will be offered through the Schroders Capital Semi-Liquid structure and will add to the range’s existing funds across private equity, venture capital, real estate, private credit and infrastructure. Schroders is backing the launch with €100m of seed capital. The new fund reflects the ongoing convergence of public and private credit markets into one asset class, or ‘corporate credit continuum’, allowing European investors to benefit from relative value opportunities among high yield bonds, syndicated loans and European senior secured private loans.

The fund will allocate its cash flows towards the most compelling risk-adjusted, idiosyncratic opportunities across this continuum in real-time as market opportunities and risks evolve.

By investing in a broad spectrum of credit assets, the portfolio has the potential to deliver attractive and robust income, yield, enhanced diversification and alpha from a broad and wide-ranging investment universe. Combining high yield bonds, syndicated loans and private loans can harness the beneficial characteristics of each type of corporate credit in a diversified way.

Given the liquidity profile of the fund’s underlying assets, the ELTIF will provide daily NAV, offer daily subscriptions and monthly redemptions.

The fund will be managed by three specialist leveraged finance portfolio managers, Henry Craik-White, Amit Staub and Daniel Pearson , supported by Schroders ’ European Credit research and investment team. These fund managers will work together closely to focus on identifying bottom-up relative value opportunities. Henry Craik-White, Lead Fund Manager, Schroders , said: “Public and private corporate finance is increasingly converging as more companies exploit funding flexibility to improve the efficiency of their balance sheets.

“There are now three credible financing options for many European corporates; private loans, broadly syndicated loans and bonds. Indeed, from a company’s standpoint, these are interchangeable, depending on the financing need and market conditions. Companies will exploit any dislocations in financing cost between these three formats of credit, and we believe that investors should have the same opportunity.”

Patrick Vogel, Head of European Credit, Schroders , said: “This ELTIF is an exciting and innovative new ELTIF fund that breaks with convention by bringing public and private corporate credit together in one single credit strategy, managed in a holistic way, by one integrated team. It offers clients the prospect of very attractive income and returns plus the potential for active management to generate alpha, and with that the potential to exceed expectations.

“Our market leading credit team is built around a core DNA of high alpha and that principle is the same, whether for direct corporate lending or bonds.”

Schroders has comprehensive public and private credit capabilities; the firm’s global fixed income platform includes more than €10 billion leveraged financed AUM and integrates over 100 years of combined leveraged finance experience, benefitting from a 40-member research team.

Schroders is already a market leader in offering structures which provide greater access to private markets through its range of listed vehicles, as well as semi-liquid and illiquid structures.

ELTIFs, as EU-regulated fund vehicles, now benefit from the ELTIF 2.0 amendments, which came into force in January 2024, improving flexibility and simplifying processes. This new framework supports the delivery of private market investments to a growing base of non-professional investors.