The pension plan will share in the long-term economics of M&G's growing Margay platform
Ontario Teachers' Pension Plan will commit up to €200m in equity for future issues of M&G Investments' Margay collateralised loan obligation programme, under a joint venture the two firms announced to expand M&G's European CLO platform.
The plan will also take a share in the long-term economics of M&G's European CLO business, according to the announcement.
The firms said they will deploy capital on an investment-by-investment basis under an agreed investment framework.
Michael Merkoulovitch, senior managing director, credit at Ontario Teachers', said the deal broadens the plan's holdings.
He described European CLO equity as "an attractive asset class" that diversifies the current programme, and said the plan and M&G aim to grow Margay "into one of Europe's leading CLO platforms."
M&G launched the Margay programme in 2023 and currently manages €1.6bn of CLO assets within a broader €10bn loan platform.
e M&G's wider structured and private credit business, which M&G said has grown to €27bn over a 25-year track record.
Its Life business has invested more than £1bn in structured credit strategies over time.
Fiona Hagdrup, head of private corporate credit at M&G Investments, leads the platform.
James King, head of private and structured credit at M&G Investments, said the tie-up gave the firm "access to aligned long-term capital and the expertise of Ontario Teachers'," which he said would help scale the programme and broaden its investor base.
On the outlook, Hagdrup said a disciplined, selective approach to credit "remains key" as conditions evolve, pointing to fundamental analysis, relative value and portfolio construction as tools for navigating the cycle.
M&G said the venture supports its aim to lead in European private assets through its €93bn private markets business, as at 31 March
M&G Investments forms part of M&G plc, which reported £371bn in assets under management on the same date.
