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First Eagle Credit Opportunities Fund Sees Strong Demand in Retail Channel

April 14, 2022, 07:00 AM
Filed Under: Retail

First Eagle Investments (“First Eagle”) announced that total assets under management in the First Eagle Credit Opportunities Fund (A-Share Class: FECAX; I-Share Class: FECRX) had eclipsed the $350 million threshold approximately 18 months since its launch. The Fund seeks to provide current income with a focus on delivering attractive risk-adjusted returns over the long term through a multi-sector portfolio that invests primarily in private and public alternative credit assets. As of December 31, 2021, the Fund’s distribution yield was 7.09%.*

“We are excited to have seen such broad interest in the Credit Opportunities Fund by retail financial professionals and their clients,” said Jack Snyder, Jr., National Sales Manager, Wirehouse and RIA Channel and Head of Retail Alternative Investments at First Eagle. “With traditional fixed income investments continuing to offer low yields but high risks given the rising-rate environment, alternative credit assets may represent an attractive option for those seeking income. The structure of the Credit Opportunities Fund—complemented by education and training tailored specifically for financial professionals—enables us to offer an institutional-quality solution in the retail channel, and we’re happy with the demand we’ve seen.”

As a closed-end interval fund registered under the Investment Company Act of 1940, as amended, the Credit Opportunities Fund provides investors with quarterly liquidity, giving the portfolio managers greater flexibility to invest in alternative income-generating assets like private credit and syndicated loans that historically have offered higher yields relative to traditional securities in exchange for reduced liquidity. At the same time, the Fund is offered for sale continuously at NAV, like an open-end mutual fund, and is available to a broad audience with no requirements that investors be accredited or qualified.

“We appreciate the support of our early investors in the Credit Opportunities Fund,” said Chris Flynn, President of First Eagle Alternative Credit. “As the investment environment in general grows more complicated, we expect deep credit research and prudent investment selection will be key to success in the alternative credit space. We’re pleased to leverage our team’s extensive market experience to provide this ‘core’ alternative credit strategy to retail investors and their financial professionals as they consider the role such assets can play in a traditional allocation.”

* The Fund intends to declare income dividends daily and to distribute them monthly at rates intended to maintain a more stable level of distributions than would result from paying out amounts solely based on its current net investment income. This is managed by paying out less than all of its net investment income or by paying out undistributed income from prior months, with any potential remaining deficiencies characterized as a return of capital at yearend. To date, the distribution yield has only been derived from the Fund’s net investment income and has not included borrowed funds or a return of capital. The distributions might not be made in equal amounts, and one month’s distribution may be larger than another. Distribution yield presented excludes any special dividends, is based on the fund-level composite of all share classes, and indicates the annual yield received if the most recent composite Fund monthly distribution paid was the same for an entire year. The yield represents a distribution and does not represent the total return of the Fund. Because the Distribution Yield is annualized from a single month’s distribution, no investor actually received the yield in a given year. The yield is calculated by annualizing the most recent composite monthly distribution paid by the Fund and dividing it by the Fund’s average month-to-date NAV from the as-of date.

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