Alternative income

The six asset classes that make up alternative income share a number of characteristics. They are income-producing, unlisted, private assets and may offer illiquidity or complexity premia over comparable listed credit.

Stable income from alternative assets

Having been investing in alternative assets since 1984, our insurance heritage has given us deep experience in originating, executing and ongoing management. Our clients benefit from access to our extensive pipeline, encompassing a breadth of deal opportunities ranging from primary deal origination through to the largest deals in the market. Our dedicated multi-asset team creates bespoke alternative portfolios to meet client-specific requirements.

Capital preservation

Strong covenants and real asset security provide lower expected defaults and higher recovery rates than comparable public credit. A dedicated credit team works alongside analysts and specialists, with the tools and skills to rate issues across industries and structures.

Diversification

The risk profiles of alternative assets are different to listed credit, as well as each other. We offer an integrated multi-asset private market platform, with access to diverse drivers of return.

Enhanced income

Alternative income assets can offer attractive yields, including an illiquidity premium above corporate bonds of similar credit quality.

Cashflow-driven

Alternative income assets can provide low-risk, long-dated, fixed uplift or inflation-linked income. This can complement a liability-driven investment approach or reduce lower yielding matching assets like government bonds.

Key risks

Investment risk

The value of an investment and any income from it can go down as well as up and can fluctuate in response to changes in currency exchange rates. Investors may not get back the original amount invested.

Illiquidity risk

Where funds are invested in illiquid private assets, investors may not be able to switch or cash in an investment when they want because private assets may not always be readily saleable. If this is the case, we may defer a request to switch or cash in shares or units. Investors should also bear in mind that the valuation of real estate is generally a matter of valuers’ opinion rather than fact.

Need more information?

For further information, please contact our investment sales team.

Real assets views

RA19/0008/05012020