Tue, Oct 27, 2020
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. PE/VC: Coronavirus triggers borrowing spree by private equity managers, Venture capital investments reach new high in Brazil, Private-equity giants are racing to sell assets before year-end[more]

    Coronavirus triggers borrowing spree by private equity managers From FT: Private equity managers are turning to specialist borrowing facilities to ensure their highly leveraged strategies can survive the coronavirus pandemic, but there are growing concerns that the use of these complex f

  2. What's behind Viking's strong gains[more]

    From Institutional Investor: Viking Global Investors had strong performance in its three main funds in the third quarter, bringing gains for the year into the mid-to-upper teens. The Tiger Cub hedge fund firm, co-founded by O. Andreas Halvorsen, is far outperforming the broad-market averages a

  3. PE/VC: A record number of private equity funds are in the market - but closing them won't be easy, PE firms must be prepared to face challenges across each fund vintage, Wall Street is helping private equity recycle its old assets[more]

    A record number of private equity funds are in the market - but closing them won't be easy From Institutional Investor: Although there are a record number of private equity funds in the market, they are raising money at a slower pace, delaying fund closes, according to new data from Pre

  4. SPACs: Hedge funds scoop up SPAC shares, Hedge funds surface in wave of Biopharma SPAC deals, SPAC to the future: How blank-check acquirers could reshape emerging companies' roles in public markets[more]

    Hedge funds scoop up SPAC shares From Institutional Investor: Hedge funds aren't just launching their own special purpose acquisition companies -they're also scooping up shares of these blank-check companies. Basso and Difesa have cashed in on the boom in blank-check companies. Firm

  5. Opalesque Exclusive: A.W. Jones emerging manager fund of funds passes three year milestone, up +12.61% through August[more]

    Bailey McCann, Opalesque New York for New Managers: An emerging manager fund of funds from A.W. Jones has just passed its three-year milestone and is outperforming so far this year. The fund was up 3.29% in August a