I’m passionate about broader representation within investment teams

CIPAM’s fixed income team invests across public global ABS and investment grade corporate credit markets, as well as private real estate, corporate and securitised debt in Australia and New Zealand.

As relative value-driven credit investors, our asset allocation decisions across the credit space are in part driven by the illiquidity and complexity premia we can extract.

Given the spread compression in corporate credit markets, illiquidity and complexity premia are close to their historical wides across some securitised credit markets, such as Australian/New Zealand private securitised credit and pockets of the US and European CLO market. But long credit spread duration is a trade I would be avoiding right now.

Aside from activity in March-April 2020, it is buying European CLO mezz that sold off sharply through the energy default cycle in early 2016 in sympathy with US CLOs, despite minimal energy exposure within European CLO pools.

Not having enough faith in big pharma around the development timeframe for covid-19 vaccines and their efficacy. In other words, we could have been more aggressive in terms of risk appetite over the course of 2020.

New Zealand prime minister Jacinda Arden — she represents a generation of leaders whose style is authentic and empathetic, yet she acts decisively, and is consistent in her convictions and values.

It seems that with every new wave of the virus the economic impact is softer than with the previous one, as businesses have adapted their business models where possible, and consumers and corporates alike are flush with liquidity. It is hard not to be constructive on credit fundamentals, but we are less constructive on technicals, particularly in markets where net supply is expected to remain elevated.

I’d like to see ESG considerations embedded into investment firms’ business practices, not just as part of the investment process, but also at a platform level. For example, more diversity and a broader representation of different segments of society within investment teams is one aspect I am passionate about.

Banks de-leveraging is an ongoing theme within the Australian/New Zealand market. Similar to what we have seen in the UK, a large number of non-bank lenders are setting up shop to fill the void with product offerings ranging from reverse mortgages and buy-now-pay-later to SME large ticket equipment finance. This has led to a broad opportunity set for credit investors with attractive risk-adjusted returns on offer. CIPAM’s global credit platform is well placed to continue providing funding solutions to our non-bank lending partners.