Episodes 280 and 281 of the InsuranceAUM.com Podcast + 12 New Articles!
Episode 281: How Can BDCs Be Used to Optimize Direct Lending?
In this episode of the InsuranceAUM.com podcast, host Stewart Foley , speaks with Michael Occi , President of Morgan Stanley Investment Management Private Credit’s BDC platform, to explore how insurance investors can leverage BDCs to gain deeper insights into the direct lending market. They discuss how BDCs provide transparency into asset quality, credit conditions, and portfolio performance, offering valuable data that insurance investors can use to assess risk and optimize their strategies. Michael explains the evolution of BDC structures, the growing role of non-traded BDCs, and how these vehicles fit into the broader private credit landscape.
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Episode 280: The Right Way to Invest in Emerging Market Debt
In this episode of the InsuranceAUM.com podcast, host Stewart Foley , sits down with Vlad Liberzon, CFA , partner and portfolio manager at GoldenTree Asset Management , to discuss the evolving landscape of emerging market debt (EMD) and how insurers can approach the asset class strategically. With over 20 years of experience in EMD investing, Vlad shares insights into the asset class’s transformation, from its early days of high correlation and commodity reliance to today’s diverse and uncorrelated opportunities across 90 countries. He breaks down the factors driving EMD’s growth, the risks insurers often associate with the asset class, and why many may be overlooking key opportunities.
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Exploring the Relevance of Asset Liability Duration Matching in P&C Companies: Myth or Must?
The collapse of Silicon Valley Bank in 2023 served as a wake-up call for the banking industry, highlighting the critical importance of asset liability management (ALM). Banks may need to liquidate assets to meet customers’ cash flow needs, sometimes realizing losses at inopportune times. This focus on ALM is not unique to banking; it is also a cornerstone of risk management in the insurance industry. Life insurance companies, in particular, employ ALM approaches to manage risk. Their investment portfolios need to be “liability-driven” due to the unique nature of their life insurance and annuity products.?When it comes to Property and Casualty (P&C) insurance companies, the benefits of incorporating asset liability duration matching in constructing asset portfolios are less clear. Unlike life insurance companies, P&C insurers deal with shorter-term and more unpredictable liabilities, such as claims from natural disasters or bodily injury, potentially leading them to perhaps think about ALM differently. This paper will first outline the various ALM approaches used by life insurance companies. We will then examine the enterprise, fixed income, and liability profiles of P&C companies based on the latest public statutory statements.
Click HERE to read more from New England Asset Management, Inc. (NEAM, Inc.)
SPDR? ETFs Chart Pack - Feb 2025
SPDR? ETF Chart Pack – All the charts you need to help you navigate the market. From macro and market trends to ETF flows, fundamentals, and more.
Click HERE to read more from State Street Global Advisors
StepStone Private Equity 2025 Market Outlook
The private equity market is evolving, with new opportunities emerging even amid macroeconomic uncertainties. Our 2025 private equity market outlook highlights key trends shaping the private equity landscape and offers insights on how investors can capitalize on these shifts.
What to expect in 2025
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Insurance Quick Takes: The latest from the NAIC on CLO and bond fund capital charges
On February 11, the NAIC’s Risk-Based Capital Investment Risk and Evaluation Working Group provided an update on two topics of critical interest to US insurers: a project aimed at modeling CLOs to create standalone capital charges and a proposal to align capital charges across different fixed income vehicles. In our latest Insurance Quick Takes video, Tim Antonelli, Head of Multi-Asset Strategy – Insurance and Portfolio Manager, shares his thoughts on these initiatives, including:
Click HERE to read more from Wellington Management
H1 2025 Alternative credit insights: Sourcing new pathways
Alternative credit is not a new phenomenon, however, up until the 2008 Global Financial Crisis (GFC), it was largely overlooked by investors. The crash was a catalyst for the market. Banks froze traditional lending options and limited those capabilities due to tighter regulations shortly after. Borrowers had to look elsewhere for financing, opening up the world of alternative credit.
Our first of 2025 insights piece highlights the development of the alternative credit market and how it has allowed for greater innovation and how different segments of alternative credit can offer new opportunities across the risk/return profile for investors.
Click HERE to read more from Nuveen, a TIAA company
C-PACE outlook amid economic and political shifts
From a policy standpoint, C-PACE is a state and locally legislated program which has received support from both Republican and Democratic controlled states, and has been passed under all presidential administrations since its inception in 2008. As markets adapt to volatile political and economic landscapes, we expect the asset class to continue to offer investors stable returns and opportunity.
Key highlights discussed include:
Click HERE to read more from Nuveen, a TIAA company
Duration has lost its sting
After a difficult couple of years, the outlook for the bond market is once again constructive
Global bond markets have exhibited mixed performance in 2024. While German 10-year government bond yields oscillated between 2.00% and 2.60% since the year's start, characterized by significant intraday volatility, spread on Investment grade (IG) and High-yield corporate bonds narrowed considerably, reaching multi-year lows in some instances. This divergence suggests a heightened level of investor nervousness, yet simultaneously underscores a robust demand for fixed income assets. 2024 did not prove to be the year for fixed income that was widely heralded twelve months ago. Looking ahead, however, we are optimistic that the attractiveness of the bond market could become more apparent in the coming months. We expect that the narrative of recent years, that duration is inherently bad or dangerous, might no longer be tenable in the future. Quite the contrary.
APAC CIO View
The data center (DC) industry in APAC continues to demonstrate dynamic growth with no signs of a deceleration. Southeast Asia is at the forefront of this growth, receiving billions of investments from hyperscalers and colocation operators particular in Malaysia and Indonesia. In June 2024, Google Cloud announced a $2 billion investment to develop its first DC in Malaysia, followed by Oracle’s commitment of over $6.5 billion in AI and cloud computing infrastructure in October 2024.
This marks a significant shift of DC development landscape, as DCs have historically been established in developed markets with strong internet infrastructure (Table 1). Yet, these markets are becoming less attractive as AI workloads rise. In contrast to primary markets, the availability of affordable power and water makes secondary markets ideal candidates for DC development. The evolving DC landscape reflects changing DC requirements driven by AI computing, making these emerging markets increasingly appealing for hyperscalers and DC operators.
How might the U.S. election and China’s stimulus package affect Asian fixed income?
Our Asia fixed-income team analyzes the likely effect of the U.S. election and other recent major events on the region’s fixed-income markets.
Key takeaways
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COP29 and related announcements set the stage for the expansion of high-integrity carbon markets
Decisions made at and around the UN Climate Conference (COP29) in Baku reinforce the key role that carbon markets fueled by private capital will play in facilitating global ambitions to counter climate change.
The end of 2024 has been a sprint to progress regulations and voluntary frameworks that will have a significant impact on carbon markets. From emissions reduction standards that will facilitate international airline emissions reductions to country- and global-level compliance markets and voluntary quality standards, the foundations for global carbon markets to scale are being established at an accelerating pace. As scientists around the world continue to sound the alarm that our collective climate action is insufficient to avoid the worst effects of global warming, there’s no time to lose in advancing both rapid emissions abatement and the scaling of carbon markets as a transitional tool toward a sustainable net zero future.
Click HERE to read more from Manulife Investment Management
In the Gaps: Ares Alternative Credit Newsletter - Winter 2025
In the latest edition of In the Gaps, we’re building upon some of the themes we discussed in our last edition, zooming out to make the supply-demand picture a little clearer. We’re sharing insights into a few sectors affecting tides of capital, like digital infrastructure and consumer finance. Finally, we defy gravity a little with some lessons learned from last quarter’s Spirit Airlines bankruptcy. The newsletter also spotlights Rocket Learning, an organization focused on early childhood education in India working to ensure that all children, regardless of income or background, can access quality early childhood education tools in their formative years. Members of our team recently had the opportunity to see Rocket Learning’s impact first-hand, and we could not be more excited to share more of their story with you.
Click HERE to read more from Ares Management Corporation
Beware of Bull Market Complacency
As is often the case following periods of strong market performance, “bull market complacency” can creep in as investors lose sight of the fundamentals that anchor valuations. The extreme of this view is that the credit quality of each distinct issuer is irrelevant. At PPM, we strongly reject this point of view.?? ??? Here is what else you will find in today’s newsletter:
Infographic:?Let’s take a closer look at current conditions to gauge how likely the potential may be for M&A and IPO activity to flourish in 2025 and provide opportunities for investors.
Private Equity:?Although the consensus is for a bright 2025, now is not the time to forgo extensive underwriting and due diligence as certain PE tailwinds come with risk.
Investment Grade:?Heightened focus on political impacts as well as a more aggressive M&A landscape should provide chances for IG investors to put their money to work. We believe credit selection will likely be critical in 2025.
High Yield:?In our view, the supportive elements of the HY credit cycle should continue this year with fundamentals stabilizing and technicals remaining robust.
Click HERE to read more from PPM America, Inc.