London-headquartered asset management group Henderson Global Investors has launched the Henderson Cash-flow Driven Investment (CDI) fund.
The new strategy targets primarily the defined benefit pension schemes turning cash-flow negative, and will be co-manged by Colin Fleury, head of Secured Credit and Stephen Thariyan, global head of Credit.
It aims to help defined benefit pension schemes meet their cash-flow needs over the coming five to ten years while avoiding selling down assets at inappropriate times or holding high cash balances.
Commenting on the launch, Fleury said: “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.
“Different pension schemes have different needs so they will typically have other sources of income and cash-flow maturing at different times in the coming years. Therefore, this strategy can be structured over varying time horizons, with varying distributions.”
Nick Adams, head of Institutional, added: “Henderson’s CDI strategy brings together our experience in managing multi-sector fixed income, secured credit and buy & maintain credit portfolios. Combining these approaches is a natural extension of our existing capabilities, both in terms of asset class coverage and the modelling of cash-flows.
“The development of this new strategy continues our focus on delivering outcome-oriented fixed income solutions for institutional clients, in this case helping to address an issue that is rising up the agenda of UK trustee boards.”
Henderson managed £100.9bn (€117.2bn) in assets as at 30 September 2016