The Montreal, Canada based money manager Cordiant Capital Inc has raised a total of US$250 million for investments in emerging market loans. The goal of the fund is to fill the void left by European and American banks on lending into this market.

The new fund is known as Cordiant Emerging Loan Fund IV would be offering senior secured loans to private borrowers. The initial investors to the fund include insurance companies, pension funds as well as sovereign wealth funds.

Because of the dearth of lending finance from banks from Europe and the US, the interest rates have increased for emerging market loans. In a statement, Cordiant CEO David Creighton said, "Our fund gives investors low cost access to that opportunity without the volatility inherent in a competing asset class like emerging market bonds."

According to Cordiant's April 8 statement, bank lending to the emerging markets declined by 20% to just US$276 billion in 2012.