AP1 invests $330m in global high yield via Nomura
AP1 – one of five buffer funds for Sweden’s state pension – has appointed Nomura Asset Management to manage a $330m (€279m) global high-yield credit mandate.
Majdi Chammas, AP1’s head of external management, and Tina Rönnholm, the fund’s portfolio manager responsible for external high-yield investments, said in a statement: “[Nomura] has a very powerful investment philosophy and process that is well proven both over time and in various market conditions.”
Nomura’s Ireland-domiciled Global High-Yield Bond fund was chosen by AP1 following a “comprehensive” global tender process last year, they added.
David Crall, CIO at New York-based Nomura Corporate Research and Asset Management (NCRAM), said the firm was pleased to have established the relationship with AP1.
“Like AP1, we have a strong commitment to responsible and sustainable practices, both in running our own business and when investing client assets entrusted to us,” he said.
“We believe that incorporation of environmental, social and governance factors is congruent with our ‘Strong Horse’ investment philosophy.”
NCRAM said it had a total return-oriented investment approach driven by bottom-up credit research.
It dubs the investment method as the “Strong Horse” approach, because it tries to find corporate issuers deemed capable of carrying their debt through economic cycles.
The Nomura investment will sit alongside a $400m allocation to Hermes Investment Management’s global high-yield bond strategy, which AP1 made last year.
The SEK333bn (€32.4bn) buffer fund’s 2017 investment return of 9.6% after costs was the strongest of the four main AP funds.