The fund will invest in the global senior loans market, focused on the US where there is greater liquidity. The fund will be structured as a Qualifying Investor fund (QIF), marketed to experienced investors with sterling, euro and US dollar share classes.
The new launch comes just one week after JP Morgan Asset Management announced a new closed-ended fund launch, investing in US senior secured loans.
The Legg Mason fund will be managed by portfolio manager TJ Settel. Currently the asset class is around $600bn in size.
In a recent interview Settel said: "The market has developed quite a bit over the past decade and today there are over 10 major dealers that provide daily trade execution, offering liquidity very similar to that of the high-yield market."
The group said that the fund will be modelling on an existing floating rate investment strategy in the US, which has run since 2003 and is currently yielding 5.8%.
The strategy also offers some protection against rising interest rates. The new fund will be seeded internally with around $100m.
