GPM Credit Risk Sharing Strategy

The Man GPM Credit Risk Sharing (‘CRS’) strategy seeks to generate and distribute consistent current income while preserving capital by acquiring and managing CRS securities referencing high-quality loan portfolios originated and serviced by global banking institutions.
 
  • Established track record since 20111
  • Floating rate exposure can benefit in inflationary environment
  • Risk-optimized capital allocation
 
  • Complements other credit exposures (liquid credit, alternative credit)
  • Targets high credit quality and loan security
  • Evergreen structure

1. Refers to investments made by Matthew Moniot since founding Elanus Capital Management. Matthew joined Man GPM in February 2022.

Approach

The Man GPM CRS strategy seeks to offer access to high quality, senior secured corporate loan exposures in an effort to generate uncorrelated returns and consistent income. The Strategy seeks to acquire and manage CRS securities referencing what we consider to be high-quality loan portfolios originated and serviced by sponsor banking institutions.

Investors gain exposure to the most senior part of a borrower’s capital structure by investing exclusively in CRS transactions referencing revolving credit facilities and term loans, which are typically only held by relationship banks, as opposed to being distributed in the liquid capital markets.

Historically, these senior loans have shown significantly better recovery versus senior unsecured bondholders, and recovery for large corporate revolvers is even higher due to legal/structural seniority. Traditionally this exposure has been inaccessible to investors, as banks held these loans, and benefitted from the most senior claims2.

2. Source Fitch study, “Revolving Credit Facility Performance in Bankruptcy” July 2021 and “Ultimate Recovery Rate Study”, March 2021, covering the 2002-2020 period.