Somerset Asset Management launched a new alternative income strategy using the same investment approach Dave Van Benschoten, senior vice president and head of fixed income asset management, used when he managed the $3 billion General Mills Inc. defined benefit plan. Mr. Van Benschoten, who was vice president and treasurer of General Mills, Minneapolis, joined Somerset in July. At General Mills, Mr. Van Benschoten managed about $1 billion in fixed income and other yield-generating assets internally the same asset classes hell be managing in Somersets alternative income strategy, said Michael Ott, Somerset president and CEO.
The strategy will invest roughly 25% to 40% of its assets in typical fixed income, another 15% in REITs and master limited partnerships, roughly 30% in preferred stocks and income deposit shares, roughly 10% in closed-end bond funds and preferred funds, and roughly 5% each in callable government agencies, high-yield bonds, high-dividend stocks and energy or high-income placements.
The strategy seeks uncorrelated yields along with capital appreciation that cant be gained from a typical bond portfolio, Mr. Ott said.