Alcentra European income trust to target 5.75% yield

BNY Mellon subsidiary Alcentra has launched a European fixed income investment trust targeting a 5.75% annualised yield.

The Alcentra European Floating Rate Income fund invests in 60 floating rate senior secured loans across 15 industries, from companies either domiciled or with significant operations in Europe.

The fund, which has been launched with £80 million in assets, has 50% exposure to the UK, and has avoided southern Europe. The company is aiming to reach £100 million by the end of the year.

David Forbes-Nixon, chairman and chief executive officer, said European loans are attractive since they are typically private transactions where the lender has more protection than on traditional corporate bonds.

‘They are typically structured with robust covenant packages which, when combined with this access to private information, tends to allow lenders greater control over their investment than is the case with public asset classes,’ he said.

Alcentra is the specialist sub-investment grade subsidiary of BNY Mellon.