news - NN Investment Partners and FMO to launch Emerging Markets loans fund

NN Investment Partners (NN IP), formerly known as ING Investment Management, and the Dutch development bank *Financierings-Maatschappij voor Ontwikkelingslanden (FMO) have joined forces in developing an emerging markets loans fund. The fund will enable institutional investors to invest in emerging markets corporate loans – an attractive asset class that traditionally has a high barrier to entry.

Nanno Kleiterp, Chief Executive Officer at FMO: “As a pioneer in emerging market debt with an excellent track record, NN IP is a natural partner for FMO to work with on this fund. The partnership will help us multiply our impact by mobilizing investors and enabling them to follow in our steps. Our ambition is to become the leading impact investor in 2020 by doubling our impact and halving our carbon footprint.”

The partnership is a strategic fit, leveraging on the strengths of both partners:

• Institutional investors will be able to invest in emerging markets loans, expected to generate stable and attractive returns with a strong ESG profile;
• The fund will mirror loan investments made by FMO, giving investors the opportunity to invest alongside the organisation, taking advantage of their strong underwriting capabilities and track record in emerging markets;
• As ESG is fully integrated in FMO’s credit process, investors in the fund will be investing with full measurable impact.

Gerard Roelofs, Head of Client Group International at NN Investment Partners: “This partnership combines the best of what we each have to offer: FMO’s extensive experience and solid track record in corporate loan investing in emerging markets and their high credit ratings (AAA Fitch ratings and AA- from S&P) along with NN IP’s fund management and client servicing capabilities.”

Investing in emerging markets loans can help institutional investors in the search for yield while offering a certain amount of protection should interest rates rise. The new fund also caters to institutional demand for less liquid assets.

Hans Stoter, Chief Investment Officer NN Investment Partners: “Emerging market loans provide good diversification within an EMD portfolio, while at the same time offering an attractive market risk premium. It complements NN IP’s broad EMD strategy range and extends the range of the illiquid fixed income products we have to offer to institutional investors.”

Yvonne Bakkum, Managing Director of FMO Investment Management: “By investing in this fund institutional investors can contribute to economic growth in developing countries and to building a sustainable world. Experience indicates that those who incorporate sustainable ESG practices into their business enjoy stronger long-term financial results and long-term viability, which in turn reduces expected default risk and therefore improves the risk-return profile of the investments.”