Trans-Canada Capital Taps Pretium for $110 Million Credit Wager

(Bloomberg) -- Trans-Canada Capital Inc., which manages pension plans for Air Canada, is investing $110 million with hedge fund Pretium to scoop up structured- and corporate-credit opportunities that emerge from the turmoil caused by the coronavirus pandemic.

Pretium, the $16 billion money manager founded by former Goldman Sachs Group Inc. partner Don Mullen, will target mispriced assets in the leveraged loan and collateralized loan obligation markets, according to a person familiar with the strategy.

“The current economic environment is poised to create a range of compelling investment opportunities,” Mullen said in a statement announcing the investment.

As the Federal Reserve keeps interest rates at historic lows to coax the economy back to health, managers of pension and insurance money are being forced to look beyond U.S. Treasuries to ensure they can meet their obligations. The California State Teachers' Retirement System allocated $1 billion to direct lender Owl Rock Capital Partners, it said Monday.

Pretium is in discussions with several clients for future mandates related to opportunities in structured and corporate credit, said the person, asking not to be identified discussing a private matter. The firm has made 13 hires since the onset of the pandemic as it seeks to buy cheap assets battered by the economic fallout.

Pretium will also look for opportunities in beaten-down sectors such as retail, seeking out credits that can weather the turmoil, the person said.

A representative for the hedge fund declined to provide specifics on the firm's investment strategy.

©2020 Bloomberg L.P.