2024: A Year of Normalization and a Nice Tailwind for Credit
Romain Miginiac of Atlanticomnium
Mar 25, 2024
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1. Philip Rosenberg: Our investment strategy focuses on subordinated debt of national champions mostly financials. This approach typically yields higher returns than the high yield market while also having significantly lower default rates. Overall, our portfolio is considered much less risky than high yield investments, despite delivering a higher yield. The question is - why do we enjoy higher yields than the high yield market?
2. Philip Rosenberg: In recent years, the subordinated dept market especially contingent capital securities (AKA CoCos) have attracted a lot of attention and price volatility. Much to the benefit of investors the market has been wrong by pricing these securities to perpetuity. How have you as an investment manager managed this price variance and volatility number taken advantage of the benefits of our investors.
3. Philip Rosenberg: Many clients look at these instruments and think that they can easily invest directly without with an investment manager. How do you as an investment manager add real value and effectively benefit our clients Justifying participating via a managed strategy and not Investing directly.
4. Philip Rosenberg: As we know, Yields are attractive right now and many investors feel that a fair amount of price recovery is still to come - do you concur? And how do you feel investors should position themselves for this asset class in the coming months?
5. Philip Rosenberg: Finally, a question about sustainability. You are Head of Sustainability in the investment team, and also run a dedicated climate bond strategy. What are your thoughts about the sustainability space, especially when it comes to the credit and what drivers will make this approach more attractive to investors?
Video transcript
1. Philip Rosenberg: Our investment strategy focuses on subordinated debt of national champions mostly financials. This approach typically yields higher returns than the high yield market while also having significantly lower default rates. Overall, our portfolio is considered much less risky than high yield investments, despite delivering a higher yield. The question is - why do we enjoy higher yields than the high yield market?
2. Philip Rosenberg: In recent years, the subordinated dept market especially contingent capital securities (AKA CoCos) have attracted a lot of attention and price volatility. Much to the benefit of investors the market has been wrong by pricing these securities to perpetuity. How have you as an investment manager managed this price variance and volatility number taken advantage of the benefits of our investors.
3. Philip Rosenberg: Many clients look at these instruments and think that they can easily invest directly without with an investment manager. How do you as an investment manager add real value and effectively benefit our clients Justifying participating via a managed strategy and not Investing directly.
4. Philip Rosenberg: As we know, Yields are attractive right now and many investors feel that a fair amount of price recovery is still to come - do you concur? And how do you feel investors should position themselves for this asset class in the coming months?
5. Philip Rosenberg: Finally, a question about sustainability. You are Head of Sustainability in the investment team, and also run a dedicated climate bond strategy. What are your thoughts about the sustainability space, especially when it comes to the credit and what drivers will make this approach more attractive to investors?
Disclaimer: Past performance is not a reliable indicator of future performance. There is no guarantee that forecasts will be achieved.
Important legal information
The information in this document is given for information purposes only and does not qualify as investment advice.
Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information.
Past performance is not an indicator of current or future trends.
The mentioned financial instruments are provided for illustrative purposes only and shall not be considered as a direct offering, investment recommendation or investment advice.
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