Apr 28, 2022
SLC Opts for Multi-Asset Credit Strategies to Blunt Bond Swings
, Bloomberg News
(Bloomberg) -- SLC Management, the fixed income and alternative asset manager of Sun Life Financial Inc., is turning to a mix of public and private debt strategies to lure investors looking to navigate global political and economic uncertainties.
The firm, which has around C$347 billion ($270 billion) of assets under management, views pooling investment grade and higher yielding, riskier assets from public, structured finance or private debt markets as a growing business in current volatile markets, said Tom Murphy, head of institutional business. The strategy was put in place a couple of months ago, he said.
“If you think about the themes in the marketplace with volatility in fixed income markets, our clients look at diversifying so multi-asset credit makes a lot of sense,” said Murphy, who was also recently named president of SLC Management Fixed Income. “We’ve seen some great success with it, and we hope to build on it.”
Worldwide, fixed income investors are grappling with the worst total returns in at least 32 years as inflation spurred in part by supply chain disruptions caused by the pandemic and the biggest military conflict in Europe since World War II runs at historically high levels. That’s forcing central banks to raise interest rates even as fears of a looming recession increase. The firm expects the Federal Reserve to raise interest rates by 200 basis points by the end of the year from current levels, Murphy said in an interview from Boston.
SLC Management is also “incubating portfolios” in the environmental, social and governance, or ESG, space, said Murphy. And it expects business to continue expanding in the “private fixed income” corner of the market as pension funds enter a sector where insurance companies have primarily played, he said.
The asset manager has around 1,300 institutional clients, including its parent company. Insurance companies account for around 60% of its clients, followed by pension funds with over 25% while the reminder of cash comes from other entities such as high net worth wealth management.
The company is seeking to grow its footprint in the high net worth corner of U.S. and Canadian markets and may be open to partnering with other organizations, Murphy said.
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