How can insurers counter the margin compression resulting from new money rates lagging portfolio book yields? In a series of upcoming blog posts, we will highlight opportunities and risks across the six traditional levers that insurance companies can pull to offset this yield erosion.
Many “experts” have recently warned of impending doom in the high yield bond market. High yield returns have certainly been impressive since the energy- and commodity-led sell-off of late 2015/early 2016, but our view of today’s economic and market landscape doesn’t lead us to the conclusion that the end is near. Rather, we find reasonable value in the market and used the March sell-off to add high yield exposure.
Private credit is often viewed through the lens of mezzanine below-investment grade debt. But this is only a subset of the asset class. In fact, investment grade offerings account for a large part of the total market. So what do structure, pricing, and liquidity look like in the investment grade private credit market? How are deals sourced best in the investment grade market? The answer may come as surprise to some investors.