A Dutch asset manager is aiming to sell housing loan investments popular in Europe to UK pension funds.
DMFCO, which manages more than €25bn of mortgages in the Netherlands, is in talks with the Financial Conduct Authority for regulatory clearance to make and manage housing loans in the UK.
It has been meeting with potential backers, including large retirement schemes and insurers, to persuade them to take a plunge into a market still associated with the global financial crisis 15 years ago.
UK pension funds, among the largest in Europe, have largely kept away from exposure to home loan-related investments since the 2008 crisis, when securities that included low-quality mortgages were bundled up into a bond and sold to investors.
DMFCO argues its model is different from the residential mortgage-backed securities and structured products that offer income based on payments from many individual mortgages. Instead, investors put their money directly into a pool of mortgages and earn a higher return, but take on all the risk. DMFCO said it is targeting “premium” borrowers with good credit history.
