The fund named as Alcentra European Floating Rate Income will be listed as an investment company on the London Stock Exchange and invest in senior secured loans and floating rate senior secured bonds issued by European corporates.
The fund aims to produce a quarterly dividend of 5.5% per annum in the first year of full investment.
Alcentra’s intention is to raise at least GBP150m for the fund which is expected that the portfolio will be diversified in 60 investments across 15 industries, with no single borrower exposure of more than 5%.
Alcentra chairman and CEO David Forbes-Nixon said that since the global financial crisis in 2008, corporate balance sheets have strengthened and the leverage employed by sub-investment grade corporate borrowers in the US and Europe has fallen.
"The Company will aim to provide an attractive mix of steady dividends with some capital growth, combined with the downside protection of a secured asset class," added Forbes-Nixon.
