Strategy

The U.S. Investment Grade Private Credit Strategy invests in a diverse portfolio of U.S. private fixed income assets – and seeks to achieve excess return over comparable public bonds while preserving capital over the long term. Private placements are primarily fixed rate, investment grade* debt instruments, with tenors from five to 30 years, but with structural protections, including collateral and maintenance financial covenants. The private placement issuer base includes public and private corporate issuers across the major sectors (industrials, utilities, financials), as well as special-purpose entities supporting project finance, infrastructure, and structured transactions.

The strategy’s objective is to achieve positive relative value over U.S. corporate bond yields of 60-70 bps on average.

Philosophy

The strategy focuses on niche sectors and complex transactions to obtain excess returns and utilizes the breadth and depth of a highly experienced team of investment professionals to originate and execute investment grade private credit opportunities. Private assets are sourced by our private credit team either directly from issuers, sponsors or developers, or indirectly through banks, brokers and other agents and intermediaries. The team focuses on investment opportunities that have strong credit metrics while structuring appropriate senior security and covenants for additional downside protection.

The private credit team integrates external research with internal market and asset level research to form the basis of investment decisions. On an ongoing basis, each fixed income asset is monitored by the team for any changes to credit quality and rating. Assets are monitored relative to required financial and other reporting covenants and are subject to formal annual reviews and rating recommendations that are approved by the team’s senior management.

Investment Team

Sam Tillinghast,
President, U.S. Private Fixed Income 

*Investment-grade credit ratings of our private placements portfolio assets are based on a proprietary, internal credit rating methodology that was developed using both externally-purchased and internally developed models. This methodology is reviewed regularly. More details can be shared upon request. There is no guarantee that the same rating(s) would be assigned to portfolio asset(s) if they were independently rated by a major credit ratings organization.


Please note that Sun Life Capital Management (U.S.) LLC advises on this strategy. Sun Life Capital Management (U.S.) LLC is registered with the U.S. Securities and Exchange Commission as an investment adviser is also a Commodity Trading Advisor and Commodity Pool Operator registered with the Commodity Futures Trading Commission under the Commodity Exchange Act and Member of the National Futures Association.

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