Henderson Global Investors has launched the Henderson Cash-flow Driven Investment Strategy aimed at defined benefit (DB) pension schemes.
A new strategy, it has been developed in response to the “growing number of defined benefit pension schemes turning cash-flow negative”.
The strategy is co-manged by Colin Fleury, head of secured credit, and Stephen Thariyan, global head of credit, and aims to help DB pension schemes with cash-flow needs over the next five to ten years.
It should do this “while avoiding selling down assets at inappropriate times or holding high cash balances”, Henderson said.
The strategy can work alongside a liability-driven investment mandate through servicing pension funds’ shorter-term cash-flow requirements.
Fleury said that by structuring a high yielding credit portfolio to redeem at regular intervals, it is possible to generate a reliable stream of cash flow at an elevated yield.
“Fixed income asset classes, such as asset-backed securities, high yield and secured loans, alongside more traditional investment grade bonds, can balance the need for yield with cash-flow certainty,” he said.
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