Private Credit
Invesco Senior Secured Loans
Invesco offers investors unique access to attractive investment opportunities in senior secured loans by leveraging deep private credit expertise, an extensive track record, and a demonstrated ability to innovate in this private credit sector.
Download strategy profile30+ yrs Senior loans expertise
Experience managing senior loans across market cycles.1
$47B+ Senior Loan AUM
Senior loan assets under management across our platform.
2,000+ Unique companies
Included in our proprietary credit library.
How to gain an edge in broadly syndicated loans
Invesco uses its credit expertise and market-leading position as one of the largest asset managers in the leveraged loan market to provide investors with unique access to attractive investment opportunities in senior secured loans.
What important factors should investors consider when selecting a bank loan manager?
Transcript: View transcript
Kevin Egan (00:07):
Well, first, I think size and scale is important. It gives you allocation to new deals, which are obviously the most important thing in building a portfolio and building a diversified portfolio without having to compromise your credit standards. Because we see every deal in the market, because of our size and scale, we can turn down two-thirds of all the deals that we see and still remain fully invested.
(00:26):
Two, size and scale gives you preferential allocations. Because we are one of the largest players in the market, we get to look at deals earlier than our competitors, which means we have additional time to do due diligence, which also means that when we commit to a deal, we're helping the underwriting bank get the book built, and as a result, they reward us with preferential allocations. So again, that allows us to remain fully invested without having to compromise our credit standards.
(00:51):
Another thing I think is important is that we are on the private side of the information wall. Most of our competitors are not bank loan only and if you're a investor in a bank loan fund, you want someone who's dedicated to just your asset class. As a result, since we are bank loan only, we are on the private side of the information wall; this means that when we are underwriting a credit, we have access to material, nonpublic information from our borrowers that can stretch from management's internal projections to being able to talk to management teams between reporting period, we have access to this information, which is a competitive advantage at the underwriting and throughout the life of the credit.
(01:27):
And finally, if there's a workout situation, it means that we can always sit on the steering committee that negotiates directly with the borrower. If you own the high yield bonds and you're on the public side, you have to do one of two things. You either have to restrict your high yield bond trading, so you can sit on the steering committee and negotiate directly with the borrower on the bank loan side, or you have to not sit on the steering committee and therefore disadvantage the bank loan investors.
(01:49):
If you sit on the steering committee, there are several important advantages. One, obviously you get to effectuate the outcome. Not everybody who sits on the steering committee has the same economic interests that you do, so you're protecting the interest of your investors.
(02:01):
Two, there preferential economics frequently associated with sitting on the steering committee, backstop and other fees that are not accrued to the people who are not on the steering committee.
(02:10):
And third, because you're effectuating the outcome, we typically have a better recovery in the event of default. Loans typically recover about 80 cents on the dollar in event of default. We've done work that shows that when we've sat on the steering committee that negotiates directly with the borrower, we typically recover 86 cents on the dollar. So there's a real demonstrable advantage to being on the private side, and that comes from having a bank loan only dedicated team.
What should investors look for in a loan manager?
Kevin Egan, senior portfolio manager, describes the key capabilities investors should focus on when selecting a senior secured loans manager.
Time to watch: 2:49 minutes
Invesco is one of the largest asset managers in the senior secured loan market and one of the most active traders of loans in the world. Because of our size and scale, we often receive favorable allocations, enabling us to take active positions and offer our clients unique access to new opportunities.
Our clients benefit from Invesco’s deep and experienced credit team and our nuanced understanding of credit risks that come from decades of experience. Our research and analytic processes on the private side allow us to analyze each loan with a deeper understanding of risk. Because our perception of risk often differs from that of the market, we are able to identify attractive opportunities for our clients and transact with conviction.
We have a history of proactively engaging with management teams around ESG issues. We began incorporating ESG considerations into our investment process for broadly syndicated loans in 2015 and have independently rated over 800 global issuers using our proprietary ESG rating process.
- 16 factors are evaluated for ESG risk
- Over 1000 issuers have been independently rated for ESG
- 9-year track record of incorporating ESG discussions as part of our investment committee review
As of December 31, 2024
Awards for our ESG approach in broadly syndicated loans1
Best Specialist ESG Research
Any reference to a ranking, a rating, or an award provides no guarantee for future performance results and is not constant over time.
Innovating new possibilities for our clients for over 30 years
Senior Secured Loans team
Kevin Egan
Thomas Ewald
David Lukkes
Michael Craig
FAQ
Senior secured loans are loans issued by below-investment grade companies and purchased by institutional investors. These loans are senior secured and have a floating rate coupon that adjusts with short-term interest rates.
Invesco uses these terms interchangeably to refer to the same types of loans — senior secured loans issued to below-investment grade companies and purchased by institutional investors.
The market for senior secured loans has grown to over $1 trillion globally.
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