GLOBAL - North American fund management firm Hartford Investment Management is targeting the UK and European credit markets in a push to secure more business outside of the US.
The firm – which manages approximately US$100bn in fixed income assets with US$3.5bn based outside the US – is a wholly owned subsidiary of Hartford Financial Services Group, one of the biggest insurance companies in the US.
Hartford Investment Management’s director of institutional sales, Ronan Burke, said: “We are seeing a gradual movement away from the balanced management approach in Europe and within fixed income, we also see increasing demand for specialist managers and in particular managers with strong capabilities outside of just government bonds.
“We expect the broad fixed income investment markets [in the UK and Europe] to more closely resemble the US institutional market over time with investors hiring specialty managers to further diversify their underlying fixed income holdings and to maximise their potential returns.”
Hartford offers UK and Euro credit strategies to UK and European investors and has recently seeded UK core plus and Euro core plus strategies. The firm also provides US-based strategies like high yield, emerging markets, inflation protection and bank loans.
Burke noted an increase in demand for Euro denominated investment grade credit in the UK, Denmark and the Netherlands but believes this type of strategy appeals to investors across Europe.
Hartford Investment Management senior vice president Robert McHenry (pictured) said changing pensions legislation in the UK should spur demand for corporate bonds. He predicted greater demand for high yield, emerging markets and non-dollar bonds in the future.
“Interestingly, there are already some individual pension funds in Europe which are probably a step ahead of their US counterparts in terms of alpha generation ideas within their portfolios and we would expect this to become more of the norm, rather than the exception,” he said.
“This movement should benefit firms like ours, who have many years experience offering creative fixed income solutions.”
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.