John Hancock Investment Management, a company of Manulife Investment Management, and Marathon Asset Management launched John Hancock Asset-Based Lending Fund. The fund is subadvised by Marathon Asset Management, a leading global credit investor with nearly 25 years of experience successfully investing across multiple sectors, including structured credit and asset-based lending, where it has deployed more than $20 billion over its history with approximately $23 billion in assets under management as of Dec. 31, 2021.
“We’re excited to bring our accredited investors access to private asset-based lending and specialty finance sectors through such an accomplished and experienced partner in Marathon,” Andrew G. Arnott, CEO, John Hancock Investment Management, and head of U.S. and Europe, Manulife Investment Management, said. “With elevated inflation, rising interest rates and ongoing market volatility, advisors and their clients are looking at alternative asset classes such as private credit to generate differentiated sources of yield and return that have been historically less correlated with traditional stocks and bonds.”
“Marathon is thrilled to partner with John Hancock Investment Management to bring this institutional-quality alternative credit strategy to a broader set of investors,” Bruce Richards, CEO of Marathon, said. “Asset-based lending, which has historically delivered attractive yields with strong downside protection across different market environments, is especially well suited for this environment, where financial conditions are tightening but companies still need to finance their operations and growth.”
The fund’s investment objective is to seek to provide high current income and, to a lesser extent, capital appreciation. The fund seeks to invest at least 80% of its net assets (plus any borrowings for investment purposes) in asset-based lending investments, which may include investments in distressed loans. The fund is managed by Marathon Co-Founder, Managing Partner and CIO Louis Hanover, Partner and Senior Portfolio Manager Andrew Springer, and Portfolio Manager Edward Cong.
The fund pursues a flexible all-weather approach to private credit with the goal of delivering strong returns with low volatility and low correlation to other asset classes across the market cycle. This will enable it to take advantage of a robust pipeline of asset-based capital solutions across sectors in which Marathon has deep analytical capabilities and experience, including:
- Healthcare loans and royalty-backed credit—Healthcare loans secured by revenue, intellectual property rights and royalty streams on primarily FDA-approved drugs and devices
- Transportation assets—Transportation assets such as loans and leases backed by commercial aircraft and shipping vessels
- Residential mortgage loans—The origination and acquisition of residential real estate loans and legacy mortgage loans pools, including distressed or nonperforming loans and newly originated nonagency mortgage loans
- Commercial real estate loans—The origination and acquisition of commercial real estate loans secured by housing-related and traditional commercial real estate property types
- Consumer-related assets—Acquisitions of consumer loans, including distressed loans and high-yield asset-backed securities (ABS) backed by various forms of non-mortgage household debt, largely focused on select market segments such as automobile loans and leases, credit cards, and personal installment loans
- Corporate asset-based credit—Asset-based corporate credit secured by real estate, equipment, receivables, inventory, and intellectual property rights, among other assets
- Liquid securitized credit—Securities backed by residential real estate, commercial real estate, collateralized mortgage obligations, secured corporate loans, and other asset-backed securities.
Marathon determines sector-level asset allocation and considers several factors in its asset allocation, including, but not limited to, portfolio-level credit risk, geographical and industry diversification, interest-rate risk, capital deployment optimization and macroeconomic conditions. The fund is not limited in the amount of its assets that may be allocated to any sector.