Sponsored article
SHAPING YOUR WORLD THROUGH PRIVATE CREDIT MARKETS
Julien Halfon
Head of pension solutions BNP Paribas Asset Management
It’s always good to have options, especially when you have specific requirements. While it’s true that plain vanilla works some of the time – public market performance is ideal for certain parts of a portfolio – increasingly, investors are finding they need something more personalised to match large sections of profile.
their liability
Individual problems need individual solutions and the building blocks to create them can often be found in private credit markets. For investors who only have experience of traditional gilts and publicly traded investment-grade bonds, these markets may seem like a voyage into the unknown. But, by taking this step, investors can open a whole new world of versatile, outcome-based opportunities that can closely match their liability profiles and investment beliefs.
Deep, wide and personalised
Due to the depth and breadth of private credit markets, investors have many avenues to explore to find something that fits their needs.
While public markets may be dominated by large, international companies and governments, the range available through private markets is much more diverse, with each security offering its own characteristic that can often be fine-tuned according to investor requirements.
In addition to featuring companies in all sectors, spanning all sizes and maturities, private markets also offer a variety of risk, currency and duration profiles. The wide scope of securities means investors can find options to fit required levels of return, risk and cash generation at a price that fits their budget. Due to the relatively closer relationship between borrower and lender in public markets, aspects such as floating rate options to hedge moves in central bank-controlled interest rates, can be ‘baked in’ at an early stage. By trading away from public markets, investors also have a choice in the level of liquidity they want their securities to offer. Choosing those that trade relatively infrequently can help to dampen overall portfolio volatility, while securing long-dated cash-flows. But private markets do not just offer illiquid securities. There are plenty of liquid options, too. These can be blended to create an investment portfolio that fits each investor’s profile.
18 March 2020 portfolio institutional roundtable: Fixed income
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28
