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Head of Institutional Sales & Insurance-Germany
Head of Client Coverage-EMEA
Insurance Advisory & Strategy-Asia Pacific
Insurance asset management coordinated globally
As a pioneer in insurance asset management, DWS started working with insurance companies in 1929. Trust, knowledge and customized solutions crafted over time are what we deliver insurers.
Our global platform delivers multi-asset investment programs in an insurance context across active and passive fixed-income, equity, alternatives, cash, and sustainable strategies. It is supported by an understanding of the dynamics and complexities of insurance investing in a constrained environment that is subject to state regulations, solvency requirements, rating agency considerations, reporting and accounting standards.
Welcome to another edition of the InsuranceAUM.com podcast. Today's topic is real assets, private debt, and we're joined today by Matt Addesa, Private Market Specialist at DWS.
U.S. real estate has responded to higher interest rates. Market prices have dropped about 20% from their Spring 2022 peak. We believe that appraisal values will converge to market levels by year-end.
Despite uncertainties regarding monetary policy and a potential recession, assessing valuations across the bond universe at the start of the year has yielded some interesting fundamentally-driven ideas for 2023, despite the recent bouts of volatility.
U.S. real estate investment performance has stumbled in response to rising interest rates. However, property fundamentals are robust. While a mild recession might soften leasing momentum, we believe that markets will remain historically tight as construction slides.
Liquidity and Volatility in the Bond Market with Shilpa Lakhani, Head of Portfolio Management-Fixed Income Solutions at DWS
Today's topic is liquidity and volatility conditions in the bond market. And we are joined today by Shilpa Lakhani, Head of Fixed Income Portfolio Solutions in the Americas for DWS.
2022 has so far been a painful year for fixed income investors. No market has been spared the pain of rising interest rates and the municipal bond market has been no exception.
Investors are facing a volatile financial environment amid inflation, ongoing Covid-19 restraints, and geopolitical conflicts. In uncertain times, companies with higher credit scores tend to be more resilient, financially healthier, and suffer less with economic fluctuations than their counterparts with low credit scores. Within this framework, Solactive is pleased to announce the launch of the GBS United States 500 Enhanced Investment Grade Index, which will be used for an investment management mandate from Zurich managed by a global asset manager firm DWS America.
Despite surging interest rates and slumping financial markets, real estate displayed positive momentum in the first quarter of 2022. Fundamentals were robust: Vacancies dropped to an all-time low (since 1988), fueling double-digit Net Operating Income (NOI) growth.
Just two years after the onset of COVID, the U.S. has jumped from the proverbial frying pan into the fire. Pandemic restrictions have been lifted and the economy has largely recovered. But fiscal and monetary remedies, tight labor markets, stretched supply chains, and now war in Europe have pushed inflation to a 40-year high.
For much of 2021, the Federal Reserve (the Fed) had expected that inflation would be “transitory.” In previous discussions going back to July 2021, DWS’s outlook for inflation was to the contrary—that it would be longer-lasting and not transitory. Since then, our inflation outlook hasn’t changed.
Forecasting “what’s next” and assessing potential credit impact on investment-grade energy sector bonds.
While yields are likely to continue rising, credit fundamentals in the investment-grade market look strong. Earnings and balance sheets look healthy, and higher yields could attract institutional investors.
U.S. real estate performed remarkably well in 2021. Although the year began tepidly amid a surge of COVID infections, the steady rollout of vaccines unleashed a resurgence of economic, leasing, and transactions activity in the spring and summer. By the third quarter, overall vacancy rates had dropped to nearly their lowest levels in more than 30 years.
U.S. real estate started the year on a strong footing. Fundamentals and prices stabilized as the economy gathered momentum. Investment performance returned to pre-COVID levels.
_ Covid-19 has led many types of inequalities to widen over the past year with implications for economic growth, investment returns, government policies and meeting the Sustainable Development Goals (SDGs)
Selectivity and diversification – Two key elements in managing high yield bonds to protect on the downside and take advantage of market dislocations. Going global offers diversification and alpha opportunities, not only during times of volatility and uncertainty.
Asian Investment Grade Bonds: An Attractive Fit For European insurers?
For insurers interested in casting the net wider in the search for income, delving a little deeper into non-established parts of Structured Finance or down in the stack of established segments might have the potential to provide increased income.
In its final opinion on the 2020 Review of Solvency II, EIOPA proposes changes to various parts of the Delegated Regulation.
Insurance companies have historically allocated toward higher quality yield instruments. Over the past decade, amid a persistent low interest rate environment, insurance companies have gradually increased their allocations outside of investment grade bonds into primarily the higher quality end of the high yield corporate bonds.
With the emergence of the COVID-19 pandemic and the resulting policy response, 2020 has been a tumultuous year for the U.S. investment-grade market. Yield spreads widened dramatically when the pandemic was declared but recovered quickly when the Federal Reserve launched various programs to support this asset class and other segments of the fixed income market.
By any metric, it has been a great run in buyout PE over the past 20 years. Strong performance relative to public markets over this period has driven impressive industry growth with buyout NAV at $1.7T as of the end of 20181. The performance has attracted a wave of capital. Dry powder in the space in excess of $700B represents almost 3X the LTM deal volume2. Rising PE allocations have driven valuations up as more capital competes for deal flow. As a result, it has been a great “seller’s market” with consistently strong investment returns. But what happens when a sponsor is not a seller but a committed “buyer” of a portfolio investment they have been managing for a few years?
The real estate debt asset class can provide debt investment options that may outperform traditional benchmarks while potentially offering attractive returns, downside protection, diversification benefits, and lower volatility.
The bill approved by Congress on December 20, 2017, should have significant supply and demand effects on the municipal bond market, and the changes in relative value in relation to the taxable bond market will likely require insurers to reconsider their portfolio strategies in important ways.
Bond ETFs are increasingly popular tools for insurers looking for exposure to fixed income without worrying about fluctuations in market liquidity. Recent NAIC accounting guidance could make bond ETFs even more attractive to insurers, since it gives them greater clarity over how to treat the instruments.