Fund dedicated to co-investment with bank launched

The fund will make co-investments on an equal footing with a UK regulated bank.

A fund focused on private debt co-lending alongside bank loans has been launched by Advisors & Partners and Bank and Clients (B&C).

The Selective Real Economy Co-Lending Fund – Vintage 1, will focus on co-lending on a pari-passu basis alongside B&C, making investments in senior loans. Loans will be made to medium sized industrial and commercial countries in Europe, the UK and Canada.

By collaborating, Advisors & Partners and B&C want to align investor interests with that of a regulated financial institution. B&C was created in 2014 and provides lending and savings to individuals and businesses, focusing on residential and commercial mortgages and corporate lending.

The co-investment fund will have identical terms to B&C loans and have equal seniority in the capital structure, with asset segregation features.

Advisors & Partners says the deal offers investors confidence loans have been made following B&C’s internal origination, underwriting and monitoring policies, which are all in accordance with UK banking regulation.

Philippe Teilhard de Chardin, CEO of Advisors & Partners, said: “This collaboration will allow investors to participate exclusively in B&C’s bank internal lending programs on an equal footing, within a regulated framework.

“We expect the fund to be the first fund in a series of co-lending funds seeking to provide investors with stable, non-correlated and diversified investment returns and help to develop the long-term growth of the real economy, along-side B&C.”

The first fund, which is closed-ended, is expected to hold a first close on 31 January 2019. The fund target was not disclosed.