Press release -
Discovery Invest Launches Market-First European Credit Opportunities Fund
Johannesburg, 19 October 2021- In line with its aim to bring new investment opportunities to South African clients, Discovery Invest today announced the launch of a market first credit fund targeting annual returns in Euros of 7% per annum, net of fees and taxes.
The Discovery European Credit Opportunities Fund, managed by Ninety One, is an international structured fund that offers access to a blend of primarily private credit, as well as public credit investments, in European and other global markets.
Since the global financial crisis, due to regulatory pressure, there has been a significant decline in bank lending to small- and medium-sized European companies. This has generated an opportunity for investors to receive highly attractive potential returns by investing in private credit funds as they replace banks and provide loans to these companies.
Kenny Rabson, CEO of Discovery Invest says there are several benefits to investing in credit as an asset class.
“Investments in private credit funds can generate high stable returns and diversify an investment portfolio. Although capital and returns are not guaranteed, these opportunities offer potential attractive expected returns with a lower risk profile than global equities.”
The fund is available as a limited offer on Discovery Invest’s local lump-sum Endowment and will open on 18 October 2021, with a minimum investment value of R200,000.
There is limited capacity for the Discovery European Credit Opportunities Fund, with the offer expiring when capacity runs out, but not later than 24 January 2022 (closing date for
subscription). All investments must have forms completed and submitted by 24 January 2022. During the seven-year investment term, there will be no liquidity. This means that clients will not be able to do switches or make withdrawals.
Lei Lei, Co-Head of European private credit at Ninety One said: “We are delighted to be partnering with Discovery Invest to give investors access to European private credit. We provide bespoke loans to performing private European companies which are secured against their assets to provide downside protection. Our borrowers pay interest on our loans over time, and it is these contractual payments that drive our targeted 7% net* annual return in Euros for our investors.”
Notes to editor:
* The 7% annual target is net of fees and taxes
Discovery Limited is a South African-founded financial services organisation that operates in the healthcare, life assurance, short-term insurance, banking, savings and investment and wellness markets. Since inception in 1992, Discovery has been guided by a clear core purpose – to make people healthier and to enhance and protect their lives. This has manifested in its globally recognised Vitality Shared-Value insurance model, active in over 35 markets with over 20 million members. The model is exported and scaled through the Global Vitality Network, an alliance of some of the largest insurers across key markets including AIA (Asia), Ping An (China), Generali (Europe), Sumitomo (Japan), John Hancock (US), Manulife (Canada) and Vitality Life & Health (UK, wholly owned). Discovery trades on the Johannesburg Securities Exchange as DSY.
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