InsuranceAUM.com

Episode 173: Myth busting and impact investing in public fixed income with Nuveen’s Stephen Liberatore and Joseph Pursley

In this episode of the InsuranceAUM.com podcast, host Stewart Foley is joined by Steve Liberatore, Senior Managing Director and Head of ESG Impact Investing Global Fixed Income at Nuveen, and Joe Pursley, Head of Insurance the Americas at Nuveen, to debunk myths within the fixed income universe. The conversation dives deep into the evolution of impact investing, particularly in fixed income, challenging the misconception that impact investing is limited to equity strategies. Steve highlights how impact investing in fixed income not only drives positive environmental and social outcomes but also enhances financial performance, emphasizing that responsible investing doesn’t mean sacrificing returns.

The discussion also explores the growing market for impact bonds, including lesser-known blue and orange bonds, and how these instruments align with broader ESG goals. The trio touches on the critical role insurance companies can play in impact investing, given their substantial fixed income portfolios, and the opportunity to leverage assets to mitigate liabilities related to climate risk. The episode wraps up with personal insights from Steve and Joe, including advice on parenthood and a fascinating hypothetical lunch with baseball legend Joe DiMaggio.

Episode 172: Best Opportunities in Private Markets with Drew Schardt of Hamilton Lane

In this episode of the InsuranceAUM.com Podcast, Stewart Foley is joined by Drew Schardt, Vice Chairman and Head of Investment Strategy at Hamilton Lane. With over 30 years of experience in private markets, Drew delves into the evolution of private credit, explaining its role in today’s economic landscape and its appeal to insurance companies. He discusses the key factors driving the expansion of private credit, including the pullback of traditional banks and the increasing demand for private debt solutions. Drew also highlights Hamilton Lane’s unique approach to private equity, offering insights into the firm’s strategic focus on information access and advanced technology solutions to enhance investment decisions.

Drew further explores the top opportunities in private markets, emphasizing the importance of private credit in the current macro environment. He offers a detailed overview of Hamilton Lane’s market outlook, covering potential trends in 2024, including inflation, valuations, and liquidity. Whether you’re an experienced investor or new to private markets, this episode provides valuable perspectives on navigating the complexities of private equity and private credit, particularly within the insurance industry.

*figures are as of 6/30/23

Episode 171: Extending the Concept of Private Credit into Real Assets

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley is joined by Matt Addesa, Private Market Specialist at DWS, to explore the world of real assets and private debt. Matt delves into the current landscape of real estate and infrastructure debt, explaining where these asset classes fit within the broader private credit space. He highlights the growing opportunities in alternative real estate financing due to stress in regional banks and provides insight into how institutional investors can capitalize on these shifts. Matt also touches on the performance history and fundamentals of real asset debt, offering a detailed breakdown of the relative value opportunities across different sectors.

Matt further discusses the need for infrastructure investment in the U.S., emphasizing the $2.6 trillion funding gap in critical sectors such as transportation, electricity, and water infrastructure. He explains DWS's unique approach to infrastructure and real estate debt, highlighting the importance of asset quality, sponsor relationships, and flexibility in accessing these markets. Whether you’re a seasoned investor or new to real asset private debt, this episode provides essential insights into navigating these evolving opportunities in today's market.

Episode 170: AEW: Insights and Opportunities in Real Estate Debt

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley sits down with Dean Dulchinos, Head of Debt Portfolio Management, and Justin Pinckney, Head of Private Debt at AEW, to discuss the compelling opportunities in the commercial real estate (CRE) debt space. Dean and Justin provide an in-depth analysis of the current market environment, highlighting the impact of macroeconomic headwinds and the secular shift in office demand. They explain why the CRE debt market is leading the cycle in terms of value adjustments and how private capital can capitalize on the banks pulling out of CRE lending. The conversation touches on the structural advantages of CRE debt, including better collateralization, lower loan-to-value ratios, and attractive yield premiums in a high-rate environment.

Dean and Justin also explore how CRE debt compares to direct lending, emphasizing its collateral-backed structure and superior optionality in uncertain markets. They outline the implementation strategies for P&C, life, and health insurance companies, detailing how these institutions can navigate the CRE debt space for diversification and yield enhancement. Whether you're an insurance professional or an institutional investor, this episode offers valuable insights into the risks, rewards, and opportunities in the evolving CRE debt landscape.

Episode 169: Today’s Risk Environment with Juliette Kayyem

In this compelling episode, Stewart Foley interviews Juliette Kayyem, a senior national security analyst for CNN and a Pulitzer Prize finalist. Juliette shares her unique insights on two of the most pressing issues of our time: the Israeli-Hamas conflict and the impact of climate change on the insurance industry. Drawing on her experience in government, academia, and media, she explains the broader "threat environment," shedding light on Israel’s intelligence and response failures, the evolving geopolitical risks, and the delicate balance required to prevent escalation.

The conversation shifts to climate risk, where Juliette discusses the increasing severity of natural disasters and their profound impact on insurance companies' ability to assess and price risk. She highlights the regulatory challenges and the urgent need for more sophisticated modeling to help consumers and policymakers understand the growing risks of climate change. This episode offers listeners a deep dive into the intersection of national security, climate, and insurance, with expert commentary that bridges these crucial topics.

Episode 168: Quality High Yield Offers Performance Resilience and Diversification

In this episode of the InsuranceAUM.com podcast, Stewart Foley sits down with Paul Massaro, Head of Global High Yield Franchise at T. Rowe Price, to discuss the leveraged credit market and how the current economic landscape impacts high-yield bonds. Paul offers a deep dive into the structure and evolution of the $1.4 trillion high-yield bond market, emphasizing its growing quality and resilience. They discuss the surprising outperformance of leveraged credit in 2023, despite ongoing macroeconomic challenges, and how high-yield bonds offer unique diversification benefits to insurance portfolios.

Paul also shares insights into T. Rowe Price's approach to high-yield allocation within fixed income portfolios, discusses where he and his team are finding value, and highlights the importance of capitalizing on short windows of opportunity in volatile markets. This episode is essential for insurance investment professionals looking to better understand the high-yield space and how it can fit into diversified portfolios, especially in today’s uncertain economic environment.

Episode 167: Emerging Markets Investing for Insurers with Pramol Dhawan, Head of Emerging Markets Portfolio Management at PIMCO

In this episode of the InsuranceAUM.com podcast, Stewart Foley speaks with Pramol Dhawan, Managing Director and Head of the EM Portfolio Management Team at PIMCO, about the opportunities and considerations for insurance companies investing in emerging markets. Pramol breaks down the key reasons why EM offers compelling value to insurance portfolios, including diversification, yield enhancement, and access to high-quality, long-duration assets. He highlights the evolving definition of EM, debunks outdated perceptions, and offers insights into how geopolitical and political risks are priced and managed.

The conversation dives into technicals, fundamentals, and how PIMCO’s approach to managing insurance assets in emerging markets focuses on avoiding capital impairment while maximizing risk-adjusted returns. Pramol also touches on alternative sources of EM yield, including private market opportunities. For insurance investment professionals exploring EM allocations, this episode offers a comprehensive look at how to approach these markets effectively.

Episode 166: Opportunities in Securitized

In this episode, we dive deep into the securitized markets with Dmitri Rabin, Head of Securitized at Jennison Associates. Dmitri provides an insightful overview of how the agency MBS market has performed year to date following a tough 2022, discussing how rising interest rates, extension risk, and volatility have impacted the market. He highlights the current opportunities within the mortgage market, where valuations and spreads offer potential for investors—particularly in the extended, lower-coupon bonds. Dmitri also shares his perspective on key sectors like ABS and why Jennison favors high-quality, liquid securities that still offer attractive spreads. His analysis is grounded in long-term investment principles that fit well with insurance companies' needs for both yield and liquidity.

We also explore broader market trends such as the challenges in commercial real estate and its implications for CMBS and banks, and we discuss why Jennison takes a cautious approach toward CLOs. Dmitri breaks down how careful security selection, liquidity management, and collaboration within Jennison’s credit and rates teams drive success in securitized products. His experience and thoughtful approach to managing risk while seeking opportunity provide listeners with valuable insights into navigating today's complex fixed-income landscape.

Episode 165: Passive Investing Doesn’t Exist in Fixed Income

In this episode, Steve Boothe, Head of Global Investment Grade at T. Rowe Price, joins the podcast to share his insights on the current state of the bond market. Steve makes a bold statement—there’s no such thing as passive bond investing—and he explains why that’s the case, delving into how market structure, liquidity dynamics, and the shifting ownership landscape are transforming fixed-income markets. He also explores why recent flows into credit and equities have remained robust despite higher volatility in the treasury market, and how issuers’ ability to lock in long-term financing during lower-rate periods is shaping the supply side of corporate debt.

Steve’s conversation with Stewart Foley also covers how security selection is at the core of T. Rowe Price’s approach to navigating challenging market conditions. He discusses the firm’s views on regional banks, liquidity risks, and the interplay between private credit and corporate financing needs. Steve also highlights T. Rowe Price’s long-standing role in insurance asset management, focusing on customized solutions and the importance of understanding client-specific requirements like book yield, liquidity, and regulatory environments. This episode provides a masterclass in fixed income, unpacking complex market trends in an accessible way for insurance investment professionals.

Episode 164: Energy Transition Pathway: Investment Risks, Rewards and Unintended Consequences

In this episode, we dive deep into the energy transition with Stu Porter, Founder of Denham Capital, a leading energy and resource-focused private equity firm. Stu shares his remarkable journey, starting from his days on the trading floor at the Chicago Board of Trade, through his tenure at the Harvard Endowment, to building Denham Capital into a global investment powerhouse. He offers unique insights into the evolving energy landscape, discussing the importance of finding investment opportunities that balance sustainability with reliability and cost-efficiency.

Stu outlines Denham's four dominant investment themes for the coming decades, including the role of the U.S. as a leader in clean energy, the potential of sustainable infrastructure beyond solar and wind, the rising importance of private credit in the energy transition, and the critical challenges in securing the minerals needed for decarbonization. Stu also highlights the partnership with Aflac and the growing synergy between insurance companies and alternative asset managers. This episode is packed with thought-provoking insights on navigating investment risks, rewards, and unintended consequences in the global shift toward sustainability.