John Hancock Investment Management partners with Marathon Asset Management to expand alternatives offerings for accredited investors with Asset-Based Lending Fund

Rhea-AI Summary

On July 12, 2022, John Hancock Investment Management, part of Manulife Investment Management, announced the launch of the John Hancock Asset-Based Lending Fund, subadvised by Marathon Asset Management. This fund aims to provide high current income by investing at least 80% of its net assets in asset-based lending investments, including distressed loans. With nearly $23 billion in assets under management, Marathon brings extensive experience in credit investments. The fund targets investors seeking alternatives amidst inflation and market volatility.

Positive

• John Hancock Asset-Based Lending Fund aims to provide high current income and capital appreciation.
• Subadvised by Marathon Asset Management, which has deployed over $20 billion in structured credit and ABL.
• Targeting a flexible investment strategy that seeks low volatility and low correlation with traditional asset classes.

Negative

• Fund investments are speculative, with illiquid shares and substantial risk of loss.
• Dependence on asset-based lending exposes investors to increased volatility compared to traditional securities.
• The fund's focus on distressed loans carries risks associated with below-investment-grade securities.

 (TSX: MFC) (NYSE: MFC) (PSE: MFC) (SEHK: 945)

BOSTON, July 12, 2022 /PRNewswire/ - John Hancock Investment Management, a company of Manulife Investment Management, and Marathon Asset Management announced today the launch of John Hancock Asset-Based Lending Fund (the fund). The fund is subadvised by Marathon Asset Management (Marathon), a leading global credit investor with nearly 25 years of experience successfully investing across multiple sectors, including structured credit and asset-based lending (ABL), where it has deployed more than $20 billion over its history with approximately $23 billion in assets under management as of December 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," said Andrew G. Arnott, CEO, John Hancock Investment Management, and head of U.S. and Europe, Manulife Investment Management. "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," added Bruce Richards, CEO of Marathon. "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.

For more information on John Hancock Asset-Based Lending Fund, please click here.

Fund shares are illiquid and, therefore, an investment in the fund should be considered a speculative investment that entails substantial risks. Investors could lose all or substantially all of their investment. Shares of the fund are not listed on any securities exchange, and it is not anticipated that a secondary market for the fund's shares will develop; therefore, an investment in the fund may not be suitable for investors who may need the money they invest in a specified timeframe. The amount of distributions that the fund may pay, if any, is uncertain. Annual distributions may consist of the original investment, all or in part, and therefore may not consist of a return of net investment income. The fund's use of leverage may not be successful and may create additional risks, including the risk of magnified return volatility and the potential for unlimited loss. Exposure to investments in commercial real estate, residential real estate, transportation, healthcare loans, and royalty-backed credit and other asset-based lending, including distressed loans, may also subject the fund to greater volatility than investments in traditional securities. Investments in distressed loans are subject to the risks associated with below-investment-grade securities. In addition, when a fund focuses its investments in certain sectors of the economy, its performance may be driven largely by sector performance and could fluctuate more widely than if the fund were invested more evenly across sectors. The fund's investment strategy may not produce the intended results. Please see the fund's prospectus for additional risks.

Request a prospectus from your financial professional, by visiting jhinvestments.com, or by calling us at 800-225-5291. The prospectus includes investment objectives, risks, fees, expenses, and other information that you should consider carefully before investing.

About John Hancock Investment Management 

A company of Manulife Investment Management, we serve investors through a unique multimanager approach, complementing our extensive in-house capabilities with an unrivaled network of specialized asset managers, backed by some of the most rigorous investment oversight in the industry. The result is a diverse lineup of time-tested investments from a premier asset manager with a heritage of financial stewardship.

About Manulife Investment Management

Manulife Investment Management is the global brand for the global wealth and asset management segment of Manulife Financial Corporation. We draw on more than a century of financial stewardship and the full resources of our parent company to serve individuals, institutions, and retirement plan members worldwide. Headquartered in Toronto, our leading capabilities in public and private markets are strengthened by an investment footprint that spans 19 geographies. We complement these capabilities by providing access to a network of unaffiliated asset managers from around the world. We're committed to investing responsibly across our businesses. We develop innovative global frameworks for sustainable investing, collaboratively engage with companies in our securities portfolios, and maintain a high standard of stewardship where we own and operate assets, and we believe in supporting financial well-being through our workplace retirement plans. Today, plan sponsors around the world rely on our retirement plan administration and investment expertise to help their employees plan for, save for, and live a better retirement. Not all offerings are available in all jurisdictions. For additional information, please visit manulifeim.com.

About Marathon Asset Management

Marathon Asset Management, L.P. is a New York-based global investment advisor with approximately $23 billion of capital under management as of December 31, 2021. The firm was founded in 1998 by Bruce Richards and Louis Hanover and employs more than 160 professionals globally. The firm seeks attractive absolute returns through investments in the global capital markets and the private credit markets where it is known for its ability to provide capital solutions to companies across industries. Marathon has significant experience investing in companies through multiple cycles. Marathon possesses a unique, broad-based skill set and proprietary platform to research, analyze, and act on complex capital structures and situations. Marathon's corporate headquarters are in New York City, with international offices in London and Tokyo. Marathon is a Registered Investment Adviser with the Securities and Exchange Commission.

Please visit the company's website at marathonfund.com.

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SOURCE John Hancock Investment Management

FAQ

What is the John Hancock Asset-Based Lending Fund launched on July 12, 2022?

It is a fund aimed at providing high current income through investments in asset-based lending and distressed loans.

Who is managing the John Hancock Asset-Based Lending Fund?

The fund is subadvised by Marathon Asset Management, a leading global credit investor.

What percentage of the fund's assets will be allocated to asset-based lending?

The fund seeks to invest at least 80% of its net assets in asset-based lending investments.

What are the risks associated with investing in the John Hancock Asset-Based Lending Fund?

Investments in the fund are speculative and illiquid, with risks of losing all or substantially all of the investment.

How does the John Hancock Asset-Based Lending Fund plan to achieve high current income?

The fund will invest in various asset-based lending sectors to generate income, particularly in a volatile market.