John Hancock launches asset-based lending fund for accredited investors

Manager teams up with Marathon Asset Management to offer what it believes is the first retail asset-based loan fund.

John Hancock Investment Management and Marathon Asset Management are launching John Hancock Asset-Based Lending Fund, Private Debt Investor has learned. The fund is believed to be the first ABL fund marketed to accredited investors. Marathon, a global credit investor, is sub-advising the fund.

The new fund will pursue a flexible, all-weather approach to private credit, with the goal of delivering strong returns with low volatility and low correlation to other asset classes, the firms said in a news release obtained by PDI. This will enable the fund to take advantage of a “robust pipeline” of asset-based capital solutions across sectors in which Marathon has “deep analytical capabilities and experience”. They include: healthcare loans and royalty-backed credit; transportation assets; residential and commercial real estate mortgage loans; consumer-related assets; corporate asset-based credit; and liquid securitised credit.

in the news release, Andrew G Arnott – chief executive officer of John Hancock, and head of US and Europe for Manulife Investment Management, John Hancock’s parent company – said: “With elevated inflation, rising interest rates and ongoing market volatility, advisers and their clients are looking at alternative asset classes such as private credit to generate differentiated sources of yield and returns that have been historically less correlated with traditional stocks and bonds.”

Retail investing in private debt was the subject of a PDI cover story in March.

Marathon CEO Bruce Richards said in the statement that “asset-based lending, which has historically delivered attractive yields with strong downside protection across different market environments, is especially well suited for this environment, where financial conditions are tightening but companies still need to finance their operations and growth”.

The fund seeks to provide high current income and, to a lesser extent, capital appreciation, the statement said. It seeks to invest at least 80 percent of its net assets (plus any borrowings for investment purposes) in asset-based lending investments, which may include distressed loans. The fund is managed by Marathon co-founder, managing partner and CIO Louis Hanover, partner and senior portfolio manager Andrew Springer, and portfolio manager Edward Cong.

John Hancock Investment Management is part of Manulife Investment Management, the global wealth and asset manager of Toronto-based Manulife Financial Corp, which had $831 billion in AUM as of 31 March 2022. Marathon is a New York-based manager with $23 billion in AUM as of 31 December 2021.