EUROPE - Prytania Investment Advisors, a structured finance and credit specialist, has launched a new fund aiming to give pension funds access to the senior tranches of asset-backed securities.
The Metreta fund, which reached a first close at $57m (€43.2m) aims to generate a stable yet enhanced return in excess of LIBOR+150, offering a "liquid and low-risk credit risk portfolio", according to Prytania.
Mark Hale, chief investment officer, said: "The continued resilience of senior structured finance in light of turbulent credit markets and global macroeconomic woes offers pension funds superior risk/reward and low volatility when compared with a wide range of other near-cash products such as bank debt, EU sovereign debt and corporate bonds."
He added that pension funds that ran large cash balances increasingly wanted enhanced returns for their cash.
However, Hale stressed that those same pension funds often were unwilling to invest in instruments where the risks were unclear.
The fund will provide investors with access to weekly liquidity for management fees of around 15 basis points.
Hale added that Prytania expected economies of scale to develop as the fund grew, "helping offset the natural spread tightening anticipated as the revival in structured finance continues".