Looking at Investment Opportunities              outside the Public Bond Markets                                          ...
About the European Pensions & Investments Summit 2013  The   Investment        Network        –  marcus evans Summits grou...
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Looking at Investment Opportunities outside the Public Bond Markets: Interview with: Simon Pilcher, Chief Executive of Fixed Income, M&G Investments - European Pensions & Investments

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For more information contact: emailus@marcusevans.com

An interview with Simon Pilcher, Chief Executive of Fixed Income, M&G Investments, a fund management company at the marcus evans European Pensions & Investments Summit 2013 who shares his thoughts on looking at investment opportunities outside the public bond Markets and getting higher returns by offering bank replacement capital.

The 14th European Pensions & Investments Summit delivered more than 25 hours of world class briefings from some of the leading minds in the pensions industry including: AP Fonden 7, THEAM, Deutsche Bank, Institute for Liberty and Democracy, The People's Pension, China Reform Foundation and many more.

Join the 2015 Summit along with leading regional pension investors and global asset managers in an intimate environment for a focused discussion of key new drivers shaping institutional investment strategies today.

For more information contact: emailus@marcusevans.com

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Transcript of "Looking at Investment Opportunities outside the Public Bond Markets: Interview with: Simon Pilcher, Chief Executive of Fixed Income, M&G Investments - European Pensions & Investments"

  1. 1. Looking at Investment Opportunities outside the Public Bond Markets lending in particular, so even if the typically issued junior to the loan, but return on capital is attractive, they are offer similar sorts of yield. They also still looking to shrink their balance sheet offer a floating rate income, whereas in certain markets. high yield bonds are typically fixed rate. When you layer liquidity requirements If interest rates rise, leveraged loans and Basel II and III on top of that, the will give better protection than high result is that many banks are either yield bonds. If things go badly wrong, unwilling or unable to lend. If you look loans will get a much higher recovery at bank lending against social housing rate because they are the most senior for example, loans have historically part of the capital structure. Therefore, been for 25 - 30 years. Banks are now losses will be lower. recognising that this is too risky forInterview with: Simon Pilcher, Chief them, because they borrow short, and For these reasons, we think the loanExecutive of Fixed Income, M&G so borrowers in social housing and market is currently superior to the highInvestments many other areas of the economy now yield market, if an experienced manager need to find alternative sources of long- handles it. term capital, such as insurance“Institutional investors should look companies or pension funds.outside the public bond markets to findattractive relative value,” Simon Pilcher, Why should institutions, such asChief Executive of Fixed Income, M&GInvestments advised. “They need to pension funds, step in with replacement capital? Institutionsfind the areas of the world where thepoison of quantitative easing has not The principal reason is because they can can achievecaused future returns to disappeartowards zero, and that is to be found in get better returns in an era where government bonds and all forms of better returnsthe areas where banks either cannotlend or are having to reduce their public bonds are offering very low returns. By offering bank replacement from banklending,” he went on to say. capital, pension funds and insuranceFrom a fund management company at companies can get higher returns, and often for similar or lower levels of risk replacementthe marcus evans EuropeanPensions & Investments Summit than by investing in the public bond market. capital in2013, in Montreux, Switzerland, 22 - 24April, Pilcher uncovers investment Take real estate finance for example. an era whereopportunities in the bank replacementcapital space. The M&G fund does not invest in the property itself but lends to investors government and that do. If the value of the properlyWhy are banks withdrawing fromcertain lending activities? goes up or down by 10 per cent, it does not make a difference to us as lenders, corporate bondsThere are a number of reasons why as the fund still earns 10 - 14 per cent per annum. For a fixed income investor, are offering verybanks are withdrawing or reducing theirlending activities. The most obvious one that is better than investing in real estate equity, and for less risk than the low returnsis that there are fewer banks today than owner of the building.there used to be – some have failed,others have retreated to their domestic What risks and returns can theymarkets and many more are counting expect?the cost of too many loans made at toocheap a rate. Linked to that, many of Another good example is in thethem have been overexposed to certain leveraged finance market. Here, thelending areas, commercial mortgage loans are safer than high yield, which is
  2. 2. About the European Pensions & Investments Summit 2013 The Investment Network – marcus evans Summits group This unique forum will take place at the Fairmont Le Montreux Palace, Montreux, delivers peer-to-peer information Switzerland, 22 - 24 April 2013. Offering much more than any conference, on strategic matters, professional exhibition or trade show, this exclusive meeting will bring together esteemed trends and breakthrough industry thought leaders and solution providers to a highly focused and interactive innovations. networking event. The Summit includes visionary presentations and interactive forums on geopolitical risks in the global economy, finding opportunities for steady returns in recalibrating markets and rethinking pension products to deliver sustainable benefits in a new systemic context. www.epi-summit.com Please note that the Summit is a closed business event and the Contact number of participants strictly Sarin Kouyoumdjian-Gurunlian, Press Manager, marcus evans, Summits limited. Division Tel: + 357 22 849 313 Email: press@marcusevanscy.com For more information please send an email to info@marcusevanscy.com All rights reserved. The above content may be republished or reproduced. Kindly inform us by sending an email to press@marcusevanscy.comAbout M&G InvestmentsM&G Investments has been managing money on behalf of individual and institutional clients since 1931. With total assets undermanagement of £217 billion, M&G is a leading international fund management business with operations in 15 countries andemploying more than 1,500 people. From its headquarters in London, the company offers active investment strategies across theprincipal asset classes of equities, fixed income and real estate. (AUM as at 30 September 2012).www.mandg.co.ukAbout marcus evans Summitsmarcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discussstrategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity toindividually tailor their schedules of keynote presentations, think tanks, seminars and one-to-one business meetings.For more information, please visit: www.marcusevans.comUpcoming EventsAPAC Investments Summit - www.apacinvestmentssummit.comElite Summit - www.elitesummit.comEmerging Markets Investments Summit - www.emisummit.comPrivate Wealth Management Summit (North America) - www.privatewealthsummit.comTo view the web version of this interview, please click here: www.epi-summit.com/SimonPilcher

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