(Bloomberg) -- Investment Management Corp. of Ontario, a money manager for public pension funds in the Canadian province, is handing $1 billion to two credit managers to pursue opportunities as debt prices sink. 

The Toronto-based firm is allocating $550 million to Boston’s Loomis Sayles & Co. and $450 million to Beach Point Capital Management to run actively-managed portfolios of public credit. 

The managers complement each other, with Loomis taking on broader mandate and Beach Point having a more concentrated focus that will include stressed credit, Jennifer Hartviksen, Imco’s managing director of global credit, said in an interview Thursday. The mandates include investment-grade and high-yield debt, structured credit and leveraged loans, according to an Imco statement. 

Credit markets have seen historic volatility this year as inflation soars, causing the worst US bond-market rout in at least a half a century. US Treasury yields jumped and stocks fell again Thursday after the Federal Reserve increased rates by 75 basis points, the biggest increase since 1994. 

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The current selloff will create investment opportunities in credit just as previous periods of disruption have, Hartviksen said. “We are beginning to see some opportunities is in what is broadly described as a capital solutions space,” she said, referring to securities that have some of the downside protection of fixed income but also may include an equity-like component. 

Imco’s global credit portfolio managed C$6 billion ($4.6 billion) and returned 2.9% last year, around double the benchmark. The firm’s credit strategy, which is expected to grow to C$8 billion by 2025, is evenly split between the public and private market, with the latter being managed internally, she said. 

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“We are excited to offer IMCO’s clients exposure to diversified sources of income and attractive risk-adjusted return potential through our team’s active approach to multi-asset credit investing,” Loomis Chief Executive Officer Kevin Charleston said in a statement. 

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