Faced with an expansive, complex array of credit investment options and an urgent need to incorporate them into their portfolios as a way to drive returns, asset owners increasingly are turning to multiasset credit strategies.
Managers of MAC strategies, also called multisector fixed-income funds, report high interest and strong inflows into portfolios, which invest across a wide spectrum, from liquid, publicly traded investment-grade and high-yield bonds to illiquid private credit instruments such as securitized strategies, middle-market lending and specialty financing to industries including aviation and entertainment.
"Interest in multiasset credit portfolios has picked up materially in the last six to nine months as investors seek to diversify return sources and manage drawdown risk," said Maura T. Murphy, vice president and co-portfolio manager at fixed-income specialist Loomis Sayles & Co. LP, Boston.
Loomis Sayles managed a total of $268.1 billion as of Dec. 31, of which $5.7 billion was in multiasset credit strategies.
Recent investors in multiasset credit funds include:
Florida State Board of Administration, Tallahassee, which committed $200 million from the $167 billion Florida Retirement System to DoubleLine Opportunistic Income Master Fund, managed by DoubleLine Capital LP; St. Louis Public School Retirement System, which committed $35 million from the $866 million fund to Neuberger Berman Investment Advisers LLC's Global Opportunistic Fixed Income Fund; the $3.8 billion San Mateo Employees' Retirement Association, Redwood City, Calif., which committed $80 million to PIMCO Diversified Income Fund, managed by Pacific Investment Management Co. LLC; and the $312 million Hollywood (Fla.) Employees' Retirement System and the $340 million Boca Raton (Fla.) Police & Firefighters Retirement System, both of which made commitments of $12 million and $17 million, respectively, to GoldenTree MultiSector fund, managed by GoldenTree Asset Management LP.