Our investment professionals across SLC Management, BentallGreenOak, InfraRed, and Crescent Capital are specialists in their respective asset classes, and are uniquely qualified to provide specific, actionable insights across this diverse range of traditional and alternative investments. In the Investment Outlook, we reflect on what surprised us so far in 2022 and what clients and consultants should be thinking about during the rest of the year ahead.
A letter from Steve Peacher
Inflation and geopolitical unrest are having a domino effect across global economies. The onus is on central banks across the globe to deliver a soft landing.
Fixed income: investment grade:
Inflation risk is real and bond markets are taking notice, but attractive relative yields present an opportunity for investors.
Fixed income: below investment grade:
Interest rate hikes prompted inflows into floating rate bank loans and significant outflows from fixed rate high yield bonds. While credit fundamentals are strong, the risk of continued geopolitical unrest and potential central bank missteps remain key risks.
Private credit: investment grade:
Investment grade private credit continues to see inflows despite economic uncertainty. A shift in investor profile has impacted the types of deals and access available to investors, but unique opportunities are expected throughout the balance of the year.
Private credit: below investment grade:
Well-sourced and vetted private credit opportunities remain an attractive investment.
Investors with long investment horizons may find opportunities in private real estate amid the current market volatility.
Demand for infrastructure investments will likely increase, across both traditional and non-traditional projects, but investors should be aware of supply chain constraints.
Insurance asset management:
Insurance company portfolios have taken a hit on both sides of their balance sheets due to high inflation and rising interest rates so far in 2022. Higher reinvestment yields, a comeback for tax-exempt municipal bonds, and opportunities in alternatives can provide a silver lining for investors.
Retirement plan solutions:
Amid market volatility, pension plan sponsors are seeing their funded status climb. It will be important to revisit de-risking strategies and review opportunities to incorporate higher yielding alternatives.