Secured finance

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Insight is an active fixed income manager dedicated to working in partnership with its clients to help them meet their investment goals.

As pension funds continue to mature, our clients are increasingly telling us that they need to:

  • increase the certainty of returns through contractual cashflows
  • generate higher yields without taking additional credit risk
  • diversify beyond mainstream credit

We strongly believe that institutional investors should consider integrating secured finance investment strategies into their portfolios in order to help achieve these objectives.

Secured finance - what can it help solve?

Watch our video to hear Jeremy King, Head of Business Development, describe how we work with investors to help meet their needs through secured finance investing.

Potential benefits

Secured finance strategies aim to provide greater yield and lower risk than similar quality credit opportunities. In particular, they aim to provide:

  • A yield premium: there is an excess spread available to investors relative to investment-grade corporate credit without having to compromise on credit quality, due to the lower supply of credit to the market.
  • Greater cashflow certainty: at the heart of each investment is a contractual promise to pay, secured by ring-fenced or identified assets which increases the certainty of payment.
  • Structural protection: low loan-to-value ratios, covenants protecting the lender's position and structures with built in excess collateral are some of the ways that secured finance investments can be structured to help protect investors from defaults.

Secured finance chart

Why has secured finance got everyone talking?

Watch our video to hear Alex Veroude, Chief Investment Officer (North America) and Gareth Mee, Executive Director, EMEIA Insurance, Ernst & Young discuss what makes Secured Finance so compelling for institutional investors.

In our opinion, an allocation to Insight's secured finance portfolio may be able to help you in a number of ways:

  • By seeking to increase the return expectation of your credit allocation given the expected yield premium relative to traditional investment grade corporate credit markets.
  • Aiming to reduce the volatility of your credit or broader bond allocation given the diversification properties of these investments relative to other bonds.
  • Potentially protecting against the price impact of rising interest rates due to the floating-rate cashflows from the portfolio.
  • Help to create a reliable buffer between your short-term, liquid cashflow generating assets and your longer-term, growth generating assets.

Please note: with effect from 5 January 2018 we are no longer accepting subscriptions to Insight Secured Finance Fund. A combination of the Fund size and existing commitments will bring the fund to its target capacity. Investors with existing holdings are not affected and you can still sell your shares. We remain open to new segregated Secured Finance mandates with customised investment guidelines. Please contact your Insight relationship manager for further information.

Strategy in numbers

  • 34 US-based fixed income professionals
  • 49 members of the global credit research function
  • US$170.2bn fixed income desk assets

As of June 30, 2019. Assets under management (AUM) are represented by the value of cash securities and other economic exposures, and are calculated on a gross notional basis.*

Fund and strategy profiles

Market updates

Recent thinking

 

*Insight North America (INA) is part of “Insight” or “Insight Investment”, the corporate brand for certain asset management companies operated by Insight Investment Management Limited including, among others, Insight Investment Management (Global) Limited and Insight Investment International Limited. Advisory services referenced herein are available in the US only through INA. Figures shown in USD. FX rates as per WM Reuters 4pm spot rates.

Includes employees of Insight North America LLC (INA) and its affiliates, which provide asset management services as part of Insight, the corporate brand for certain companies operated by Insight Investment Management Limited (IIML).

Please note: the value of investments and any income from them will fluctuate and is not guaranteed (this may be partly due to exchange rate fluctuations). Investors may not get back the full amount invested. Past performance is not a guide to future performance.

Insight North America LLC (INA) is a registered investment adviser under the Investment Advisers Act of 1940 and regulated by the US Securities and Exchange Commission. INA is part of “Insight” or “Insight Investment”, the corporate brand for certain asset management companies operated by Insight Investment Management Limited including, among others, Insight Investment Management (Global) Limited and Insight Investment International Limited. Insight’s assets under management are represented by the value of cash securities and other economic exposures, and are calculated on a gross notional basis. Advisory services referenced herein are available in the US only through INA.  

The views herein represent the opinions of Insight and are subject to change based on subsequent developments. They are not intended as investment advice or to predict or depict the performance of any investment. The material contained herein is not intended to provide, and should not be relied on for, investment, accounting or legal tax advice. Further, this material does not constitute a recommendation to buy, sell or hold any security. No offer or solicitation for the sale of any security or financial instrument is made hereby.