LDI programs often face a tradeoff between hedging liabilities and enhancing diversification, among other competing goals. Our investment team discusses how IG private credit can help solve the conundrum.

Recent years have seen a surge of interest in private credit as investors seek higher yields in a low-interest-rate environment. When it comes to measuring the carbon footprint of a private investment portfolio, what should investors be aware of? Learn more in this Pensions & Investments article written by Andrew Harris, Managing Director, Sustainable Investing at SLC Management.

Our insurance specialists discuss how a multitude of risk components can affect an insurer’s capital structure, returns and ability to generate shareholder value. Read more on our latest insights.

With investors increasingly looking into the potential benefits of NAV lending, SLC Management takes a closer look at this asset class.

Welcome to SLC Management’s investment outlook for the mid-year point of 2024. Learn more about what our investment teams and solutions providers expect for public and private fixed income, real estate, infrastructure, insurers and retirement plans.

Market statistics for the private placement market sourced from Private Placement Monitor, a standard proxy for the IG private credit market.

Robust volumes, greater demand from a growing investor base and tightening spreads characterized private credit during the first quarter. New investors coming into the market has also led to increased market capacity and larger deal sizes. Meanwhile, fund finance has emerged as a growing, evolving sector for institutional investors looking for potential diversification, investment premiums and risk managed performance.

At the beginning of 2024 there was little solid consensus on the direction of interest rates. Expectations for federal bank actions ranged from rate decreases for earlier in the year to rates remaining high until at least 2025. Such uncertainty can make things difficult for fixed income investors, as in many cases bond yields are highly correlated to interest rates.

Investment grade (IG) private credit volume in Q4 2023 was the strongest for the year at US$28.6 billion, bouncing back from US$14.1 billion in Q3 2023, the lowest quarterly volume of the year. While we won’t know final results for a few months, preliminary 2023 volume of US$90.7 billion fell short of US$92.3 billion in 2022. Issuers that had something to get done came to market in the last quarter and investors responded positively. This was in contrast to much of 2023 when issuers were put off by high rates or market uncertainty and investors were either less liquid or more cautious immediately after the failure of Silicon Valley Bank.

Welcome to SLC Management’s investment outlook for 2024. In this report, our investment teams and solutions providers discuss public and private fixed income, real estate, infrastructure, insurance asset management and retirement plans.

Peter Cramer is senior managing director and senior portfolio manager, insurance asset management, for SLC Management, discusses how to protect your bond portfolios amid the threat of a recession.

A volatile economic and market environment has led to increased interest among institutional investors for more diversified credit exposure. One segment of the credit market that’s often overlooked is the narrowly syndicated credit (NSC) space, which can offer the potential for higher yields with reduced volatility characteristics.

In a slow quarter for the investment grade (IG) private credit market, robust industrial and utility sector issuance helped support volume amid decreased financial issuance. We are seeing a possible turnaround in decreasing IG private credit demand to date as markets begin to adopt “higher for longer” rate expectations. Meanwhile, we are taking a closer look at infrastructure debt investments amid increased focus on the diversification, risk management and other potential benefits of the asset class.

Issuance of investment grade private credit (IG private credit) proved resilient in Q2 2023, with the market providing some respite during uncertainty in the public debt space. H1 2023 issuance, however, is still behind that of the same period last year, largely due to a decrease in volume in financials. Amid other promising sectors, we see potential value in asset-backed securities (ABS), in particular senior IG ABS. From a volume and return perspective, 2023 could be an especially strong year for ABS investors, in our view.  

Welcome to SLC Management’s investment outlook for mid-year 2023. In this report, our investment teams and solutions providers share their insights, analyses and perspectives on public and private fixed income, real estate, infrastructure, insurance asset management and retirement plans.

The rapid expansion of Bermuda’s life reinsurance sector could result in regulatory changes that will impact everything from the management of assets and liabilities to investment allocations for insurers, say Barton R. Holl and Angel Zhu of SLC Management.

Our affiliate Crescent Capital Group’s John Fekete and Chris Wright recently sat down with Private Debt Investor to discuss the evolution of private debt and the future of credit.

In the first quarter of 2023, all fixed income markets rallied retracing some of the losses sustained in 2022 despite the late quarter market disruptions caused by the failures of two US regional banks, SVB and Signature Bank and the takeover of Credit Suisse by UBS.

Issuance for 2023 started off on a strong footing with robust volumes in Q1, which was down somewhat from 2022 but stronger than 2021 for the comparable time periods. Financial issuance for Q1 2023 was down significantly year over year, but was partially offset by strong robust volumes from industrial, utility and transportation. With continuing uncertainty around the market – from inflation, interest rates and turmoil in the banking sector – investment grade private credit (IG private credit) is exhibiting the risk/return characteristics investors might be looking for.

The current economic climate is creating valuable new opportunities in bonds and structured credit for institutional investors. To enhance return potential while decreasing risk, consider these insights from leaders at SLC Management.

In the final quarter of 2022, all fixed income markets rallied retracing some of the losses sustained during the year, though most of them still finished the year in the red.

Treasury and credit markets returned 3% in January, according to the Bloomberg US Aggregate Index, following outsized negative returns for fixed income in 2022. Investors feel optimistic about fixed income performance as inflation cools and central banks get closer to a pause in their tightening activities.

Taking advantage of yield opportunities while they last: our 2023 insurance outlook

Issuance in Q4 was an improvement from the previous quarter, but lagged year on year. In total, 2022 is expected to be either the second or third largest issuance year on record, albeit behind a record-setting 2021. The issuance pipeline in 2023 could be more uncertain due to rising rates and recession concerns, although volumes could be aided by postponed deals from 2022 transpiring in the new year. Amid increased interest in private credit, we offer insights into the specialized operational nature of these investments. 

We are pleased to present SLC Management’s investment outlook for 2023. This report reflects the diverse viewpoints of our investment teams and solutions providers, with analyses of public and private fixed income, real estate, infrastructure, insurance asset management and retirement plans.

2022 marks a historically poor year for Treasury and credit markets, dominated by aggressive tightening by the U.S. Federal Reserve in efforts to moderate inflation.

Treasury and credit markets continue to be highly volatile, with inflation, aggressive central bank action and recession fears dominating headlines. However, we continue to take advantage of market volatility though security selection and relative value trading.

Today’s environment of rising interest rates has injected considerable uncertainty into fixed income allocations for institutional portfolios. This may lead to suboptimal portfolio positionings, such as effectively remaining on the sidelines with significant allocations to cash and/or low-yielding securities, or otherwise not investing effectively against the backdrop of rising rates.

Treasury and credit markets continued to be highly volatile in October thanks to a combination of inflation, aggressive central bank actions and recession concerns. These conditions, however, meant continued opportunities for the Multi-Asset Credit strategy group.

Issuance in Q3 was weaker amid the rise in interest rates and market volatility. However, we are also seeing interesting opportunities emerge among sound European and U.K. issuers looking outside their regional public bond markets. And as October action winds up in the world of professional sports, we are reminded of the select robust private credit opportunities in this market.

The third quarter of 2022 was a continuation of the challenges seen all year as the U.S. Fed continued to combat inflation with significant rate increases, the ongoing conflict in Ukraine and deteriorating global growth prospects.

A key area of interest at the NAIC's Summer National meeting was the potential changes in regulatory treatment of collateralized loan obligations (CLOs) held on insurance company balance sheets. The details regarding the recommendation will not be available until later this year, but a few key themes have emerged.

The National Association of Insurance Commissioners (NAIC) recently held its Summer National Meeting and provided updates regarding proposals related to insurance company investments.

A combination of high inflation, aggressive monetary policies and a possible recession may have left investors with questions on how to best adjust their investment strategy. SLC Management explores how different asset classes have performed in such inflationary conditions and provide insights into the current environment.