TPAY, the private asset income fund that was launched last year by TCW, is on pace to hit an AUM milestone, according to Dhruv Nagrath, portfolio specialist for the company’s asset-backed finance group.
“That’s just about to cross $600 million in AUM,” he told InvestmentNews at Schwab IMPACT in Boston Wednesday. Nagrath, who is also a senior vice president at the asset manager, described TPAY as a “pure play” exposure to asset-backed finance.
“This is the first that we have offered in this space,” Nagrath said. “It’s been popular – I’m on a plane every other week.”
“We are providing capital to those lenders or originators that finance what’s happening in the real economy, whether it’s mortgages, or credit cards, or small business lending,” he added.
TPAY is offered on major custodial platforms from companies such as Charles Schwab, Fidelity, and Pershing. The fund aims for a net level of return of 8% to 10% per annum.
“It’s high level of yield, short duration assets, and it’s a diversifier to people’s already concentrated direct lending and public fixed income allocations,” said Nagrath.
There are varying estimates for the size of asset-backed finance market. Last year TCW put the size of the U.S. market at approximately $5 trillion but said that this is expected to grow to $8 trillion by 2027, with the global market reaching an estimated $20 trillion. However, also last year Guggenheim Investments estimated that the global asset-backed finance market is worth approximately $25 trillion.
TCW is not the only company banging the alternatives drum at Schwab IMPACT. On Wednesday Bill Cashel, T.Rowe Price's head of alternatives for U.S. wealth explained how the investment management firm is doubling its sales team to tap into advisor demand for alternatives.
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