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Henderson to increase secured debt in portfolio

Henderson’s multi-manager team is looking to add another secured loans fund to its recently renamed independent income & growth portfolio.

Secured loans are senior debt that has a priority claim over the assets of a business if the issuer defaults.

They are floating-rate securities which means they are less exposed to changes in interest rates compared with conventional bonds.

The independent income & growth portfolio already holds the Henderson secured loans fund but the management team is keen to increase its exposure to this asset class. It believes that secured loans offer very good risk and reward opportunities, with yields at around 5 per cent.

Co-manager Katy Gladstone says secured loans have historically produced fairly stable returns with some potential for capital growth.

She says the multi-manager team, headed by Bill McQuaker, has looked at several secured loans funds and has identified one that looks promising. Details are being kept under wraps but will be revealed shortly.

The Henderson secured loans fund is a qualified investor scheme that can invest overseas. In common with other secured loans funds, it is relatively illiquid.

Dealing takes place every two weeks but Gladstone says the illiquidity is compensated for by its ability to produce strong returns.

The multi-manager team has also held meetings with Gartmore following the recent takeover by US private equity group Hellman & Friedman, and is upbeat about the Gartmore UK focus, UK growth and European focus funds.

Gladstone says: “We are quite positive on Gartmore since the change of ownership. We feel it is a great improvement on the uncertainty that went before. The managers have been left with a clear focus We think it would have been less clear if Gartmore had been taken over by another asset manager.”

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