Mon, Apr 23, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Private credit catches the eye fixed income players

Wednesday, January 28, 2015

Bailey McCann, Opalesque New York:

A new white paper from BroadRiver Asset Management places the future of fixed income in the private credit markets. "The rate of interest for traditional fixed income no longer matches the cost of offsetting liabilities," authors write. "For a while, as interest rates fell during the most recent crash, investors booked gains to offset falling yields. Then came the challenge of redeploying capital into a low rate environment, which brought out the old tool kit of moving down in credit quality or increasing leverage, both of which were constrained by many investment policy statements, not to mention the increased risk. Yet, even when these limitations were eased, rates on lower-quality instruments have also fallen below investors’ income needs and are no longer sufficient to compensate for the increase in risk."

Instead of traditional fixed income investments, more managers are looking to the role of private credit investments to perform similarly to their fixed income portfolio but with better downside protections. "In accessing various "private debt" or "private credit" strategies, institutional fund managers have been able to look beyond the proxy of a debt rating for acceptable credit risk and capture yields closer to or even above the cost of their funds’ obligations," the paper says.

These pockets of the credit universe are not as tightly correlated as public equities and trad......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Sequoia takes Facebook stake as shares slide in data controversy, $1.4b hedge fund sees intact fundamentals for Facebook, Jim Cramer reveals some 'suggested hedge fund trades' amid the Trump tariffs[more]

    Sequoia takes Facebook stake as shares slide in data controversy From Bloomberg.com: The $4.2 billion Sequoia Fund bought a small position in Facebook Inc. as the stock slid late in the first quarter, investment manager Ruane, Cunniff & Goldfarb told clients. "The recent controversy enab

  2. Activist Investors - Blue Sky-owned Wild Breads faces uncertain future[more]

    From AFR.com: A Blue Sky private equity investment in artisan-style baker Wild Breads enjoyed multiple valuation upgrades despite losing millions and breaching its lending covenants, accounts lodged with the regulator last week show. Wild Breads lost $2.4 million in 2017, but Blue Sky ascribed a hig

  3. Opalesque Exclusive: Barnegat to close hedge fund to outside investors on weak opportunities[more]

    Komfie Manalo, Opalesque Asia: Bob Treue's Barnegat Fund Management said it is closing its $666m fixed income relative value hedge fund to outside investors. "The negative side to gains in Fixed Income Arbitrage is that unless we find new opportunit

  4. Investing - Hedge fund makes a big bet on malls, British hedge fund manager Odey short UK government bonds on QE bet[more]

    Hedge fund makes a big bet on malls From Barrons.com: The dominant narrative on American shopping malls is that they're dead. Crushed by Amazon.com, many brick-and-mortar retail stores are destined for bankruptcy. And where is the most retail, clustered all together? Malls. From a

  5. Performance - Hedge funds suffer first back-to-back loss in two years, Netflix performance burns hedge fund short sellers, Macro hedge fund up 14.5% in first quarter sees dollar falling, Renaissance Technologies rebounds across hedge funds in March[more]

    Hedge funds suffer first back-to-back loss in two years From Bloomberg.com: Hedge Fund returns sank for a second straight month in March, the first back-to-back loss since the first two months of 2016, as trade wars, tech-sector woes and a Fed rate hike dragged down the S&P 500 from its