Investment Strategies

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• Finding the Right Sovereign ESG Indicators: A Greek Tragedy?

  On our mini odyssey through the vast seas of sovereign ESG indicators, we sought to identify data from reliable third parties—which would provide benchmarking criteria between countries and also serve as an effective screening tool to identify outliers.

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• Three Factors Shaping the Opportunity in European Private Credit

  The growing importance of market access, a wider investor base and the impact of ESG on pricing are reshaping the European middle market.

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• North American Private Credit: Expectations vs. Reality

  The impact of COVID on North American private credit has been surprising in some ways and more predictable in others. Ian Fowler sheds light on lessons learned over the past year and offers advice on how to navigate today’s market.

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• Emerging Markets Equity: Evolving & Transforming

  Technological innovation, an increasingly confident consumer and a growing focus on ESG are re-shaping the long-term growth opportunity in emerging market equities.

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• The Structural and Cyclical Case for U.S. Real Estate Debt

  While the ongoing disruption from the pandemic will put downward pressure on market fundamentals until the virus is no longer a threat, opportunities will likely emerge across the risk-return spectrum in advance of a recovery in demand and property income.

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• Private Credit: Boring is (Still) Beautiful

  Barings' Ian Fowler discusses the current state of the North American private credit market, including insights into deal activity, pricing, and how the Barings team is investing through the pandemic.

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• Winter is Here, But Spring is Coming

  With additional fiscal relief and steady progress in vaccinations in the first half of 2021, the U.S. economy should be regaining momentum by the end of Q2, helping to stabilize real estate demand in the second half of the year. The Barings Real Estate team weighs in.

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• Are the Most Compelling Post-COVID Opportunities in Offices?

  Property investors and their lenders are shifting down the risk curve and becoming highly selective about sector exposures and asset quality. The Barings Real Estate team weighs in on the opportunity set—and why the overall outlook remains positive.

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• Four Themes for Insurance Asset Management in 2021

  Insurers have fared relatively well through the pandemic, but there is likely a long and uneven road to recovery ahead. With this in mind, there are four key themes worth considering for insurance company investors in the months to come.

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• EM Debt: Where is the Value Today?

  Barings’ Cem Karacadag discusses the outlook for emerging markets debt, including the uneven impact of the pandemic, how rising interest rates and fluctuating currencies may influence the picture, and the increasing role that ESG is playing in identifying winners and losers.

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• The False Dawn of Big Tech Regulation?

  Calls for increased regulation of tech giants have indeed grown—but will they have the desired impact? In our opinion, the focus on "big is bad" is simply ineffective in a digital world.

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• CLOs: Cautious Optimism

  Coming off a tumultuous year, CLOs look well-positioned going forward—particularly if the economy continues to heal and rates move higher.

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• EMD: Light at the End of the Tunnel

  The rollout of the COVID vaccine may be slower across emerging markets, meaning restrictions will likely remain in place for the foreseeable future. But there are bright spots—including in local currencies and companies that have adapted to this ‘new normal’.

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• High Yield: Strong Tailwinds, But It May be a Bumpy Ride

  High yield has a number of supportive tailwinds at its back—from a more manageable default picture and less exposure to potentially rising rates to investors’ continued demand for yield. But uncertainties remain, suggesting a potentially bumpy path to recovery.

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• How Healthy is Today's Private Credit Market?

  Barings’ Jon Bock weighs in on the dynamics shaping private credit today—from deal activity, to leverage metrics, to spread levels—and discusses how investors can access the opportunity.

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• 2021 Outlook: The Uneven Recovery

  The recovery in many ways looks real and durable—but it also looks uneven and, in some cases, quite unpredictable. In this discussion, investment professionals from the public and private markets discuss where they expect to see risks and opportunities in the year ahead.

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• The Case for European Real Estate Debt

  The supportive pricing fundamentals in the European real estate market, and low leverage relative to previous property cycles, suggest the asset class is well-positioned to withstand the impact of the pandemic.

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• 2021 Outlook: The Uneven Recovery

  Listen as Barings' portfolio managers and investment professionals discuss the cyclical and structural trends expected to shape public and private markets in 2021 & beyond.

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• Value-Add Beyond the Pandemic

  The shock provided by the global pandemic has roiled real estate markets around the world—which means that the quality and location of properties has never been more important.

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• European Real Estate Research Quarterly

  While COVID has negatively impacted the retail and hotel sectors, the logistics and residential sectors have been much less affected. The Barings Real Estate team weighs in on the opportunity set—and why the overall outlook remains positive.

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• Real Estate Debt: Europe’s Developing Opportunity

  Barings Real Estate’s Sam Mellor describes the trends underpinning the structural growth of real estate debt in Europe, and compares and contrasts the asset class with other public and private fixed income alternatives.

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• Why Tech Bubble Fears are Overdone

  The tech sector’s impressive performance and increasing concentration in indexes has led to concerns of expensive valuations—with some fearing that we could be in bubble territory. In our view, such worries are not justified, and we believe tech’s outlook remains healthy.

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• CLOs: A Bias Toward Quality

  CLOs continued their rebound in the third quarter, but the potential for volatility going forward is high. In this environment, there may be benefits to moving up in quality.

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• EMD: A Strong Tailwind, But Risks on the Horizon

  Segments of the EM debt market have been bright spots in fixed income this year. Will EMs outperform DMs in the months ahead—or are the risks too great? It may come down to country and credit selection.

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• High Yield: Bridging the Gap to a Post-COVID World

  What lies ahead for high yield markets? Head of Global Public Fixed Income, Martin Horne weighs in on what the bifurcated asset price recovery, record issuance levels and falling default expectations imply for high yield markets in the months ahead.

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• IG Credit: Upgrading the Roster

  In a landscape rife with risk, there may be benefits to upgrading both credit quality and liquidity.

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• Investible Trends in Real Estate for 2021 and Beyond

  A Barings 360 Webinar on Real Estate Equity

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• Post-COVID European Private Credit: A Higher Quality Market?

  On the back of COVID, transactions in the European middle market are showing decreased leverage levels, stronger documentation and improvements in pricing—suggesting a rebasing of the market from where it has been for the past several years.

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• Are EM Countries Able (and Willing) to Pay Their Debt?

  Capitalizing on opportunities in EM debt will not only require traditional fundamental analysis to determine countries’ ability to satisfy their debt obligations, but also—and perhaps just as importantly—an understanding of their willingness to pay.

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• The Crisis No One is Talking About

  The migration patterns stemming from Venezuela’s economic collapse provide key ESG insights, especially for Colombia and other neighboring countries, and particularly when compared to the case of Syrian refugees in Turkey.

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• ESG in Equities: Better Outcomes Require Better Practices

  Not all approaches to ESG are created equal—why a focus on integration, forward-looking dynamics and active engagement is the key to unlocking long-term returns in equity investments.

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• The Evolving Opportunity in Distressed Debt

  As the pandemic recedes, some companies may have a harder time managing higher debt levels than others—and as weaker issuers undergo restructurings or other stressed situations, there may be opportunities for investors to deploy more capital into distressed debt strategies.

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• Three Reasons for EM Short Duration Debt

  Emerging markets debt has shown much resilience despite facing its share of pandemic-induced difficulties. A short-dated approach, in particular, can provide an opportunity to pick up incremental yield and diversification, with less volatility.

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• ASEAN: Where Positive Demographics Meet Supportive Secular Trends

  Recent market volatility has created what we view as an attractive opportunity in ASEAN equities—particularly to tap into selective structural growth stories at compelling valuations.

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• Hong Kong-China Equities: Accelerating Areas of Opportunity

  As COVID-19 slowly loosens its grip on China, it has become clear that many of the long-term structural trends shaping the markets remain intact or have even accelerated—creating investment opportunities in Hong Kong-China equities.

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• U.S. Real Estate Research Quarterly

  As businesses and individuals continue to adapt to life in the midst of a pandemic, U.S. real estate sectors and trends continue to evolve. While some changes may be temporary, others will alter the industry and future opportunity set. The Barings Real Estate team weighs in.

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• European Real Estate Research Quarterly

  In the midst of a pandemic, some European real estate sectors are thriving, and should emerge stronger in the end, while others are merely surviving. The Barings Real Estate team weighs in on the shifting opportunity set—and why the overall outlook remains positive.

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• Investor Series: Private Assets for Insurers

  Insurance investors face unique challenges in any environment but especially against today’s backdrop of continued low rates and a global economic slowdown. Barings’ Ann Bryant and Eric Lloyd discuss strategies for incorporating private assets as part of the solution.

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• How the Pandemic Changes Real Estate

  The global pandemic is changing the way we live, work and play. Such behavioral changes have been felt acutely across commercial real estate markets, and the impact may only accelerate from here. But which changes are short term and which are here to stay?

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• High Yield: Liquidity Abounds, But What Lies Ahead?

  Ample liquidity from central banks has driven a significant recovery across markets, including high yield. But with much uncertainty still ahead, we see benefits to moving up the capital structure and considering secured assets.

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• Investment Grade Credit: Whatever It Takes

  After the historic rollercoaster ride IG credit took in the first quarter, U.S. policymakers seem to have won the day, at least for now—with their own version of the phrase made famous by former ECB President Mario Draghi: Whatever it takes.

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• CLOs: Looking Down the Road to Recovery

  CLOs rallied in the second quarter as liquidity returned and supply/demand dynamics began to normalize. While opportunities have emerged—particularly in high-rated tranches and new issue BBs—active management is key.

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• EMD: Further Room to Run?

  Emerging markets debt rallied strongly in the second quarter—and while risks remain ever-present, the asset class may benefit from continued monetary stimulus and the potential for a sharper economic bounce-back in the second half of the year.

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• High Yield: The Power of Flexibility in Volatile Times

  The journey back to normalcy will likely be punctuated with stops and starts. But opportunities will emerge—and being in a position to capture the upside is key.

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• European Real Estate: Where the Opportunities are Today

  Barings Real Estate’s Valeria Falcone describes how COVID-19 has changed the competitive dynamics across European property markets, and highlights where the team is finding and creating value today.

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• 2020 Views from the LPAC

  Over our 25+ years of investing across private markets, Barings has held hundreds of Limited Partner Advisory Committee (LPAC) seats. From this vantage point, we offer the following insights on the issues and actions currently under debate between LPs and their GPs.

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• Real Estate: The Critical Role of Asset Management in a Crisis

  Asset management is vital to long-term value creation in real estate debt and equity markets—particularly when it comes to navigating crises like COVID-19.

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• ESG: The Intent Beyond the Income

  ESG is playing an increasingly meaningful role in fixed income investing. At Barings, we formally integrate ESG across our corporate credit asset classes—but the way we apply our analysis is necessarily different due to the nuances of each market.

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• ESG in Fixed Income: Progress Over Perfection

  Fixed income investors have been slower to adopt environmental, social and governance factors, but change is afoot. Barings’ experts explain how fixed income managers can—and are—driving tangible change among corporate debt issuers—and why investors need to pay attention.

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• The EM Default Picture: More Nuanced Than Headlines Imply

  The coronavirus pandemic is creating short-term and long-term challenges for emerging markets (EMs). But not all sovereign and corporate issuers can be painted with the same broad brush, and placing too much weight on overly dire forecasts may result in missed opportunities.

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• Private Credit: The Turn of the Cycle

  Co-Heads of Global Private Finance, Ian Fowler and Adam Wheeler describe the evolving conditions in the North American and European private credit markets and where opportunities may arise in the months and years ahead.

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• Forecasting the Next Decade: Navigating Uncharted Waters

  Barings Multi Asset Group combines the underlying factors that will drive markets over the long term with today’s valuations to produce total return forecasts for major asset classes over the next ten years.

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• Four Benefits of Senior Secured Bonds in an Uncertain Environment

  Times of volatility can also yield opportunity if navigated carefully—and in the event of widespread defaults, senior secured bonds can offer some particularly compelling benefits.

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• What's Next for Private Credit?

  Now that the proverbial rubber has met the road, many investors are questioning what’s in store for private credit in the months (and years) ahead. In many ways, the current volatility is setting the stage for significant opportunities—but managing the downside is critical.

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• Global Real Estate: Cyclical & Structural Impacts of COVID-19

  As investors navigate global real estate markets in the months and years ahead, understanding the interplay between near-term cyclical weakness and long-term structural trends will be key.

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• EM Debt: Downturns, Defaults & Diamonds in the Rough

  Barings’ Omotunde Lawal and Cem Karacadag explain how COVID-19 is impacting the economies of emerging markets, and how lower oil prices and loose monetary policies may influence the future default picture.

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• EM Short-dated Debt: A Diamond in the Rough?

  COVID-19 and lower oil prices have led to indiscriminate selling across EM corporate debt, creating a potentially compelling opportunity in the shorter-dated, higher-yielding segment of the market.

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• Six Considerations for LPs Navigating Private Market Uncertainty

  When it comes to finding clarity in an environment mired in uncertainty, an open dialogue between LPs and GPs is as critical as ever.

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• Fact-finding and Fortune-telling in U.S. Real Estate

  Barings’ John Ockerbloom and Colin Gordon discuss the material consequences of COVID-19 for the real estate markets broadly as well as sector by sector—and predict how real estate portfolios may change in the years ahead.

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• Equities: Finding Long-term Growth Amid Current Volatility

  Barings’ Global Head of Equities, Dr. Ghadir Cooper, discusses the impacts of COVID-19, the opportunity for companies capitalizing on structural growth trends from technology to demographics, and the integral role of ESG in fundamental analysis.

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• Taking the Bite Out of High Yield’s Tail Risk

  A new buyer has arrived on the scene of U.S. high yield markets, and it happens to be the biggest buyer of them all: the U.S. Federal Reserve.

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• Investment Grade Credit Markets Make an About-Face

  As investment grade markets pivot sharply, with spreads reaching their widest level in over a decade, investors turn disproportionately toward quality and liquidity.

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• EM Debt: When Prices Decouple from Fundamentals

  Dr. Ricardo Adrogué discusses how the global pandemic has impacted emerging markets, including implications for sovereign and corporate debt markets, as well as interest rates and currencies.

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• High Yield: Finding Value in a Landscape Rife with Risk

  Concerns surrounding COVID-19, lower oil prices and a global recession have weighed heavily on markets—including global high yield bonds and leveraged loans. While value opportunities are emerging, the landscape is punctuated with risks that must be carefully navigated.

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• High Yield: Navigating COVID-19

  Barings’ Martin Horne puts the recent volatility in high yield markets into context and describes how the Barings team is both managing risks and finding value opportunities through the crisis.

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• EMD: Finding Fundamental Value Through the Storm

  The rapid spread of COVID-19, the precipitous fall in oil prices and the related shock to the global economy have sent markets—including EMD—into a tailspin in recent weeks. In this piece, we explore the resulting challenges and discuss opportunities beginning to emerge.

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• Distressed Debt: Despite Challenges, Opportunities Persist

  Recent market and economic volatility may be the trigger that distressed debt investors have been waiting for, but capitalizing on opportunities will require a different playbook than those of past cycles.

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• 2020: An Inflection Point for EM Currencies?

  With the financial crisis more than a decade behind us, the global financial system seems poised to begin re-leveraging. This process, which would likely take years to play out, would provide a source of funding for EM currencies, and represent a significant tailwind.

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• A Bright Spot in Higher-Yielding EM Corporate Debt

  Many EM regions have been engulfed in uncertainty for weeks or months. While these situations certainly represent risks, we also continue to find value—often in globally diversified companies that have been unfairly punished by markets because of where they’re domiciled.

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• Amid Rising ‘Mequity’ Risk, Boring Can Be Beautiful

  In both the U.S. and Europe, there is significant pressure both at the top and bottom ends of the middle market. As a result, we’re seeing potentially attractive value today in the more traditional, true middle market.

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• The Continued Democratization of Private Equity

  Private equity is an asset class that has traditionally been available only to very large, sophisticated institutional investors. But this is changing rapidly—a trend we expect to accelerate in 2020.

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• U.S. Real Estate: More Reward in Core?

  As investors in the market continue to chase yield, the risk premium—or the reward for taking that risk—appears to be diminishing. In this environment, we’re seeing some of the best opportunities in the highest-quality assets.

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• Comeback Time for International Equities?

  Because the U.S. equity market is broad and deep, there will almost always be opportunities—but in aggregate, we think international equity markets may be more compelling over the next year.

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• CLOs: Triple C's and Market Unease

  Taryn Leonard and Melissa Ricco, Co-Heads of Barings’ Structured Credit Investment Team, discuss the recent loan market weakness, and how technical pressures are creating value opportunities in the CLO market.

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• EM Debt: Warding Off Headwinds with Active Management

  Ricardo Adroguè, Head of Global Sovereign Debt and Currencies, addresses the many risks facing the global economy—specifically China, Argentina and the Middle East—and explains why active management is critical to performance.

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• Are High Yield Investors Being Compensated for Risks?

  In the context of today’s fundamental backdrop and default outlook, spread levels suggest investors are being fairly compensated, relative to other points in the cycle, for the amount of risk they are taking.

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