New York-based Stone Harbor Investment Partners says its £1 billion (€1.1 billion) mandate win from a UK local authority shows there is growing demand globally for fixed income investment strategies that are not limited by traditional benchmarks.
Greater Manchester Pension Fund, the largest member of the UK’s local government pension scheme (LGPS) network, has appointed the firm to a multi-asset credit mandate targeting Libor outperformance of 4-6% per annum over the market cycle.
Stone Harbour believe these kinds of strategies can “best uncover opportunities across different fixed income markets and help investors obtain their true investment objectives”, such as a total return or income-orientated solution.
Councillor Gerald Cooney, vice deputy of the pension fund, said the aim of the mandate was to achieve “broadly equity-like returns with lower volatility”. He added that the scheme wanted to achieve sustainable long-term investment returns for members and that Stone Harbor was chosen for its “focus on building long-term value for clients”.
The mandate invests across the fixed income spectrum including global sovereign debt, investment grade corporate debt, securitised debt, high yield, and emerging markets sovereign and corporate debt.
David Scott, portfolio manager at Stone Harbor, said the multi-asset credit strategy currently had a “somewhat conservative stance overall given valuations”, with a bias towards sovereigns over corporates.
Mike Casagranda, relationship manager at Stone Harbor, said: “Across the UK we’re seeing an increasing interest in broad outcome-oriented credit strategies, both from within the LGPS and from corporate schemes.”
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