M&G expands origination efforts in Asia-Pacific

M&G Investments’ origination team has grown its portfolio from zero to nearly $500m in the region, focusing on consumers and trading companies.

M&G Investments is expanding its origination presence in the Asia-Pacific region. The asset management arm of M&G, the UK holding company, has been building up its origination team in Asia since December 2019. The local team had deployed as much as $500 million of capital in the region as of 25 August, according to Matthew O’Sullivan, M&G Investments’ head of Asia-Pacific origination.

As Private Debt Investor reported at the end of last year, O’Sullivan relocated to Singapore to head the Asia-Pacific origination team from London, where he co-headed M&G Investments’ asset-backed securities team. The Asia-Pacific origination team focuses on private debt, private equity and public securitisations.

Current areas of interest are the consumer lending and trade finance sectors, according to O’Sullivan. Key markets include Australia, Hong Kong, New Zealand, Singapore, Japan, Taiwan and South Korea. It is also considering financing infrastructure private finance initiative opportunities throughout the region.

Offering his views on assessing the credit default risk of securitised transactions and entering into new jurisdictions in the region, O’Sullivan said: “It is about looking at the entire sector and thinking about how the performance has been and will be going forward,” adding, “In Australian public securitisations, we have people now reporting where underlying loans are having payment holidays … we are thinking about what the results of the payment holidays will be.”

His team is looking to enter new markets in the region, such as India and China. However, he noted it is not simple to gather the information and understand how their economies will perform and recover from the pandemic-led economic disruptions. “Which is obviously why we are being cautious about moving into those markets,” he noted.

M&G Investments also manages third-party capital via a commingled fund structure. In June 2018, Japan’s Dai-ichi Life disclosed that it anchored  the M&G Infrastructure Loan Fund, with a commitment of £70 million ($92.9 million; €78 million). The loan fund invests in project finance loans and bonds for public-private partnership projects and infrastructure projects in European countries.

The Asia-Pacific origination team invests funds managed by M&G Investments, which is M&G’s global brand for asset management. M&G Investments’ institutional offerings include equity, fixed income, multi-asset and real estate strategies. M&G, the holding company, managed £339 billion ($455.3 billion; €379.9 billion) in assets under management and administration as of 30 June 2020.