Investors are looking at alternative fixed income strategies and to gain higher exposure to the array of credit assets, according to multi-strategy asset manager CQS.
According to CQS’ head of long-only multi-asset credit, Craig Scordellis, over the last seven years credit markets expanded significantly and the market saw an arrival of new strategies.
However, the increasing complexity and pace of global credit markets had caused large funds to step back from attempting to manage the asset class internally as large institutions had realised they were not positioned to make effective asset allocation decisions across the credit spectrum required to do so.
“The time and processes to change allocations within fund mandates often means the opportunity has passed before a fund has time to get in – whereas we can move dynamically across a very broad opportunity set to capture returns,” Scordellis said.
According to CQS, institutional investors wanted credit and predictable income streams while de-risking to meet liabilities but they needed yield as well.
“The ‘building blocks’ approach of multi-asset means large investors can build flexible solutions that can be tailored to sit alongside existing portfolio allocations – and many investors are finding this an attractive long-term solution to their needs.”
Multi-asset credit strategies sought to exploit opportunities across the credit space by investing in senior secured loans, high yield bonds, investment grade bonds, asset backed securities and convertible bonds.
