London
10 July 2017
Reporter: Stephanie Palmer

Private debt added to SimCorp Dimension


SimCorp has added a private debt module to its SimCorp Dimension investment platform, in partnership with Danish pension fund PKA.

According to SimCorp, the new module comes as a response to the changing requirements of asset management firms as adoption of multi-asset class strategies continues.

It is also part of the firm’s ongoing focus on alternative investment, and on creating integrated solutions to meet investors’ needs to diversify as they seek risk-adjusted yields in a low-interest rate environment.

The new module supports syndicated, term, direct, bilateral, bank and commercial loans. It can be incorporates across the entire investment value chain from front to back office, using SimCorp’s investment book of record (IBOR) tool.

According to an InvestOps report commissioned by SimCorp earlier this year, private debt is the number one source of new liquidity for buy-side firms in North America, with 36 percent of respondents saying the favour this, more than selected either securities lending or derivatives.

Sofie Klarskov Simonsen, senior financial analyst at PKA, which has more than €33 billion in assets under management, commented: “With low interest rates and a rapidly growing number of financial instruments available, we’ve had to think out of the box to ensure we are able to pay out future pensions to our members. Private debt is now quite a large portfolio, alongside real estate. Its risk-return ratio is particularly attractive to pension funds like us, and compatible with our long-term strategies.”

“The new private debt module, supported by SimCorp’s IBOR, means we have a front-to-back view of our private debt transactions. It is a new module with immense potential, which, when further enhanced, will play a significant role in our performance and reduce our operational risk significantly.”

Igor Gramatikovski, securities product manager at SimCorp, commented: “By partnering with PKA and using their vast experience with private debt investments, together with feedback from our wider client base, we’ve been able to address several key challenges to this unique type of investment.”

“We are committed to ensuring that our investment platform delivers a strong offering across alternative asset classes, in line with changing market requirements and client demands.”

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