Private placements of high-yield trade-receivables
January 08, 2014- HARTFORD, Conn.–(BUSINESS WIRE)–Conning, a leading global provider of asset management services, risk and capital management solutions and research to the insurance industry, today announced that it is offering Working Capital Finance Investments for U.S. insurers.
Part of an approximately $4 trillion-plus market generally known as trade finance or trade credit, Working Capital Finance Investment programs are private placements of pools of commercial trade receivables that offer higher yields than other short duration investment options of similar quality. These high-quality floating-rate investments offer a hedge against rising interest rates.
“Insurers will continue for some time to confront an environment of slowly rising interest rates, excess market capital due to continuing central bank intervention, and reduced liquidity from the sell side,” said Richard Sega, Chief Investment Officer at Conning. “Our view is that quality, floating rate investment grade and high yield corporate credit investments are an attractive and strategic component of insurers’ fixed income portfolio.”
“The demand for privately-accessed capital makes Working Capital Finance Investments an attractive, relatively low-risk and highly customizable asset class for insurers seeking higher-yielding short-term investment options,” said Adam Dener, Managing Director and Head of Trade Finance at Conning. “We have the experience to meet the investment and regulatory needs of institutional investors, including managing the day-to-day servicing requirements of this strategy. These investments are currently most suitable for larger institutional investors who can support sizable allocations in separately managed accounts.”
The National Association of Insurance Commissioners recently approved Working Capital Finance Investments as an admitted asset for reporting entities.
Conning offers a range of investment strategies in non-core and alternative asset classes that can enhance risk-adjusted returns and portfolio diversification for insurers, while addressing their unique constraints. In addition to innovative approaches to fixed income products, these strategies include high dividend equity, master limited partnerships, liquid alternatives and other products tailored to the unique needs of the insurance industry.
Conning (www.conning.com) is a leading investment management company for the global insurance industry, with almost $83 billion in assets under management as of September 30, 2013 through Conning, Inc., Conning Asset Management Limited, Cathay Conning Asset Management Limited, and Goodwin Capital Advisers, Inc. The company’s unique combination of asset management, risk and capital management solutions and insurance research helps clients achieve their financial goals through customized business and investment strategies. Founded in 1912, Conning is focused on the future, providing clients with innovative solutions, leveraging its global capabilities, investment experience, and proprietary research. The company is headquartered in Hartford, Connecticut, with additional offices in Purchase, London, Cologne, and Hong Kong.