ICI taps Ashmore for E100m in emerging debt
UK – Ashmore Investment Management has been appointed to run a 70 million-pound (100 million-euro) emerging debt mandate for two of ICI’s pension funds.
Ashmore will run a 60 million pound (85.6 million euro) mandate in merging market debt for the ICI pension fund and 10 million pounds (14.4 million euros) in debt for the ICI specialty chemicals pension fund.
According to Mark Coombs, managing director at Ashmore, global pension funds and institutional investors are taking increasing interest in emerging market debt.
“Emerging debt is shedding its former image of high risk, but rather seen for what it is: a liquid asset class the same size as the FTSE100 with bond market volatility but equity type returns,” says Coombs.
“UK pension funds and their consultants have started to take a much stronger interest in dedicated allocations to the asset class this year.”
The appeal lies not only in the attractive returns, says Coombs, but also in the “strong diversification away from developed world corporate risk and low or negative correlations, including in bear markets, to major asset classes.”
Indeed, an ICI pension fund spokesman highlighted diversification as the reason behind the scheme’s decision to invest in emerging debt. More than half the money for the investment came from emerging market equities, confirmed the spokesman.
Yesterday it was also announced that ICI has switched some investments out of US equities into high yield debt, to be run by Muzinich.
Ashmore has over five billion dollars in assets under management.