Insurers are increasingly looking to broaden their staple diets of traditional fixed income and introduce exotic flavours of credit to the core investment portfolio in order to satisfy their appetite for higher risk-adjusted returns, diversification of risk and greater capital efficiency.
M&G Investments discusses how asset classes like private credit are becoming an important element in asset allocation decisions, offering investors access to scalable opportunities like mortgages that contain many of the same quality ingredients as their core holdings, but generate potentially attractive risk-adjusted returns.