Insights

The key concepts of responsible investment are complementary to private debt with its core focus on analysing and managing risk through relationships with investee entities.

European loans found relative favour with investors as 2018 marked a return to volatility for global markets. European loan returns were modestly positive, thanks to pricing stability and high running coupon income, unlike other risk assets.

Assessment of valuations has been anchored in the extremes of the credit and sovereign crises of the last decade. Prospective returns have improved in both investment grade and high yield markets, with crossover credits favoured. We have been adding to risk in multi-asset credit strategies but have scope for add more as value opportunities emerge.

High yield is more appropriately priced after the 2018 sell-off, but investors may be missing its attractiveness. Spread decompression has increased the opportunities both within the market and in the market overall. Attractive prospects for returns have encouraged us to add active risk to our European high yield strategies.

Richard Ryan, discusses multi-asset credit, a total return strategy invested and diversified across the broad fixed income markets.