US - San Bernardino County Employees' Retirement Association (SBCERA) has awarded Ashmore a US$125m emerging market local currency debt mandate.
The allocation will be to the local currency fund, a co-mingled fund for US institutional clients.
Tim Barrett, CIO at SBCERA said: “Investing into local currency debt we believe is complementary to our existing exposure in dollar-denominated emerging debt.
Barrett continued: “Emerging market debt in general is something we see as adding both return and diversification to our entire fixed income portfolio; particularly given recent turmoil in US and European credit markets.”
Jerome Booth, Head of Research at Ashmore, said: “The sub-prime crisis could be the final nudge towards significant emerging market currency appreciation over the next twelve months as global central banks and others stop buying as many US and European assets.
Booth added: “For investors local currency debt is a risk reducer. In particular it can offer a natural hedge against US dollar weakness. All our central bank clients and the majority of our pension fund clients now invest in local currency debt.”
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