Investment Strategies

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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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• High Yield: Halfway There?

  The shock was the story in the first quarter, the stimulus was the story in the second—but we’re decidedly not yet in the post-COVID era, and the path to economic recovery remains unclear. What does that mean for high yield?

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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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• Emerging Markets Equity: Evolving and Transforming

  From leading technologies, shifting consumption patterns, evolving business models to ESG—there are a number of factors shaping the opportunity in EM equities. Join Barings’ EM Equities team as they unpack the structural trends shaping this landscape and discuss the opportunities they expect to see going forward.

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• ESG in Equities: Not All Approaches are Created Equal

  Dr. Ghadir Cooper, Global Head of Equities, shares insight into the deliberate approach that her team takes when incorporating ESG into their investment process, including how integration, dynamism and active engagement contribute to better outcomes.

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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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• 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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• 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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• 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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• 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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• 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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• 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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• 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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• 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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• 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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• Volatility, Tech & ESG: COVID’s Impact on Global Equities

  COVID-19 has proved challenging for businesses—but opportunities have emerged, particularly for companies with business models built to capitalize on long-term structural trends. Dr. Ghadir Cooper shares her views on equity markets today and what to expect going forward.

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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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• Three Reasons to Consider a Long-Term Allocation to Small-Caps

  The volatility driven by COVID-19 and the fall in oil prices has created much uncertainty—but it has also provided a potential opportunity to make long-term investments at attractive prices.

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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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• CLOs: Volatility Continues, But Value Opportunities Emerge

  As macro volatility continued to pummel markets throughout the first quarter, CLOs felt the effects—with dramatic price moves among tranches as investors clamored for liquidity. But we believe that those who invest with an active manager and take a long-term view will benefit.

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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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• 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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• 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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• Private Credit: Why Last Cycle's Playbook Won't Work This Time

  Barings’ Jon Bock discusses the recent Insights paper he authored, which describes the mistakes that investors continue to make when allocating to private credit—and, importantly, how to avoid them.

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• Four Mistakes Investors Make in Private Credit

  Barings’ Jon Bock discusses the biggest mistakes investors make when allocating to private credit—and shares his views on why last cycle’s playbook won’t work this time around.

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• Distressed Debt: Capturing Late-Cycle Value

  Barings’ Stuart Mathieson and Bryan High discuss how recent macro events and credit market dynamics are impacting the outlook for distressed debt.

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• Are CLOs Unfairly Vilified?

  Despite the late-cycle environment, we believe the recent negative headlines on CLOs are somewhat overstated, and do little justice to the many benefits of the asset class—which has delivered impressive risk-adjusted returns and low defaults over time.

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• What Can German Equity Investors Expect in the Months Ahead?

  While the phase one U.S.-China trade deal may provide a near-term boost for German equities, there are a number of risks on the horizon that could introduce volatility in the months ahead—making stock selection as important as ever.

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• Private Credit: Where We’ve Been, Where We’re Going

  Industry veterans Ian Fowler and Adam Wheeler describe the dramatic evolution of private credit markets and explain why quality of earnings and varied definitions of ‘senior’ risk could be at the center of the next credit market storm.

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• Sentiment Shift Fuels Lower-Rated Rally

  Uncovering relative value across high yield in 2020 may require looking in less obvious places.

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• EM Local Debt’s Time to Shine?

  Emerging markets (EM) local currency denominated debt may be poised to outperform.

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• Risk-on, Risk-off & Repeat

  Sentiment continues to swing back and forth in the collateralized loan obligation (CLO) market, but bifurcation remains the constant.

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• Rates, Rallies & Risks

  Investment grade credit markets posted a banner year in 2019; can the good times continue to roll?

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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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• 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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• 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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• 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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• 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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• 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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• Seeking Big Opportunities in Small Companies

  As Europe finds itself in a climate of lackluster growth and political volatility, with an equity market that has been on an unprecedented 10-year bull run, investors are searching for pockets of value. A long-term allocation to small-cap equities is one potential solution.

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• CLOs: When Technicals Create Opportunity

  Taryn Leonard and Melissa Ricco, Co-Heads of the Structured Credit investment team, discuss where they're seeing opportunities and risks today—and why technical factors are creating inefficiencies, and hence opportunities, in the current environment.

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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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• Disruptive Technology: Keeping Pace With the Pace of Change

  Barings equity analysts, Matthew Ward and Colin Moar speak with Dr. Christopher Smart of the Barings Investment Institute about their recent whitepaper, “How Will Technological Disruption Strike Next?”

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• ESG for Sovereigns: One Size Does Not Fit All

  ESG has risen to the forefront of many investment strategies over the last decade. At Barings, our EM Sovereign Debt team takes a country-by-country approach, assessing ESG factors in the context of sustainability and—ultimately—creditworthiness.

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• Investing in Late-Cycle European Private Credit

  Adam Wheeler, Co-Head of Barings’ Global Private Finance Group, discusses the importance of discipline and risk management in today’s late-cycle environment.

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• ABS: Uncovering Opportunities Beyond the (IG) Index

  Amid an ongoing search for yield, with several potential risks on the horizon, there may be benefits to exploring opportunities outside of traditional corporate and government bonds—such as parts of the ABS universe.

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• EM Debt: Navigating the Geopolitical Noise

  From the Middle East to China to Argentina, investors face no shortage of geopolitical risks and negative headlines. But is there still value to be found across emerging markets? Dr. Ricardo Adrogué weighs in.

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• High Yield: A Time to be Nimble

  In this Q&A, Martin Horne, Head of Global Public Fixed Income, discusses the state of high yield markets amid a late-cycle environment, and why it’s critical to be nimble and selective in order to capture points of relative value.

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• Infrastructure Debt: Steady Activity, Lingering Macro Doubts

  Despite the expected seasonal summer slowdown, infrastructure debt financing deals remained steady overall in the third quarter of 2019—with strong activity in the U.S. and Canada, and slightly slowing activity in Europe, with a cautious eye toward Brexit.

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• IG CLOs: Strong Excess Return Potential, Lower Volatility

  IG CLOs can offer investors the benefits of spread pick-up and lower mark-to-market volatility, largely due to underlying collateral performance and structural security. But above all, manager selection is critical—even at the highest-rated tranches.

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• Structured Credit: Engaging Risk Tactics

  Deal flow remained steady in Q3, keeping primary market spreads range-bound. Against a backdrop of low global interest rates, we have seen increasing investor interest in European CLOs.

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• High Yield: Poised to Capture Relative Value

  Despite mounting uncertainty in the broader markets, high yield delivered broadly positive returns in Q3. As we continue to move through the late stages of a prolonged cycle, credit selection will be critical.

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• Investment Grade: Stable Fundamentals with Hints of Wear & Tear

  IG fundamentals held up relatively well in Q3, despite dampened sentiment and growing macro uncertainty. Spreads were unchanged, but may move wider before year-end.

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• Emerging Markets Debt: Taking a Hard (Currency) Stance

  EMD performance was muted in Q3, but valuations remain attractive and emerging economies are growing at a measured pace. We continue to favor hard currency assets, which are benefitting from lower rate expectations.

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• High Yield: Rates, Recessions and Relative Value

  While there is no shortage of risks to consider in today’s high yield markets—from ESG to the end of the credit cycle—Barings’ Martin Horne describes how taking a contrarian approach can help investors uncover pockets of value.

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• Emerging Markets Sovereign Debt: Does Active Management Pay?

  The performance of EM Sovereign Debt can—and does—vary widely from country to country. Barings’ Cem Karacadag explores how an active approach can be key to selecting the most attractive opportunities, while also avoiding the bad apples.

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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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• European Real Estate: Late-Cycle Value from Manchester to Munich

  Can value still be found (or created) ten years into the European property market cycle? And if so, which sectors, geographies and risk profiles look most compelling? Barings’ Charles Weeks weighs in.

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• The GFC: 10 Years On

  The mid-market continues to attract private debt investors as the Fed cuts interest rates. Could this fuel the economy and rev up the deal market, or are we nearing the end of the credit cycle? Eric Lloyd recently weighed in with a panel of experts for PDI.

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• European Real Estate Equity: Uncovering Value City by City

  Charles Weeks, Head of Real Estate Equity for Europe and Asia Pacific, discusses the backdrop for European real estate markets, where the team is seeing the most value by sector and geography, and why they always take an active approach across strategies and investment styles.

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• Distressed Debt: Seeking Opportunity in Choppy Waters

  Stuart Mathieson, Head of Barings’ Global Special Situations group, and Bryan High, Co-Portfolio Manager of the strategy, discuss how the macro environment is impacting their outlook, and where they're seeing distressed debt opportunities today.

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• U.S. Loans: Challenged Market or Veiled Opportunity?

  With loan and bond yields currently comparable, we believe—in a somewhat contrarian view to the market—there is a good argument for investing in loans, particularly in the U.S., where the economy appears to be marginally stronger than in Europe.

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• Distressed Debt: How This Cycle May Be Different

  Barings’ Stuart Mathieson and Bryan High discuss the outlook and competitive landscape for distressed debt and consider the implications of the significant growth in private credit and European high yield since the last cycle.

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• Fixed Income: Upending the Conventional Approach

  Michael Freno, Head of Global Markets, shares his view on where value can still be found in fixed income, despite the uncertain current environment—and why investors may need to look beyond traditional indexes in high yield, investment grade and emerging markets debt.

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• Fixed Income: Looking Beyond the Index for Late-Cycle Value

  Head of Global Markets, Mike Freno, sheds light on how the Barings’ teams are finding value outside of traditional indexes across high yield, investment grade credit and emerging markets debt.

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• A CIO's Perspective

  Barings' Jonathan Bock caught up with industry veteran, William Spitz, on trends in today's private markets.

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• Private Credit: How Supply/Demand Dynamics are Shaping the Landscape

  Ian Fowler, Co-Head of the North American Private Finance Group, discusses the dynamics of each middle market segment—including upper-end style shift resulting from competitive pressures—and explains why the traditional middle is the sweet spot.

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• Global Emerging Markets Equities: Where Do We Stand?

  In this Q&A, William Palmer and Michael Levy, Co-Heads for Emerging and Frontier Equities, discuss their approach to accessing the asset class, current trends, and why recent headwinds may be becoming tailwinds.

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• Is There Style Drift in Middle Market Lending?

  Barings’ Ian Fowler weighs in on the supply/demand dynamics in the direct lending space and explains why looking at the middle market as one cohesive universe can be misleading.

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• High Yield Bonds & Loans: Where to Next?

  High yield markets roared back in the first quarter. Can market fundamentals and technicals support continued strength? And how should investors factor in risks ranging from possible recession, to ratings downgrades, to liquidity concerns? Barings’ David Mihalick weighs in.

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• How We Assess Investment Opportunities

  In this video, Barings Global Emerging Markets Equities team explains its investment approach by discussing an opportunity at one of its weekly meetings.

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• Searching for Unrecognized Growth

  In this video, Barings’ Global Head of Equities, Ghadir Cooper, explains how the equities platform consistently identifies mispriced opportunities.

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• EM Debt—A Brightening Picture?

  Barings’ Ricardo Adroguè and Omotunde Lawal highlight opportunities they’re seeing from Mexico and Brazil to more challenged geographies like Turkey and Argentina—and provide insight into how they’re thinking about political hotspots like Venezuela.

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• The Changing Face of Investment Grade Credit

  In a recent interview, David Nagle, CFA, portfolio manager in the Investment Grade Fixed Income Group, discussed the investment grade credit market, including some of the issues garnering headlines recently and how the market has evolved through the years.

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• Investment Grade Credit—Rates, BBBs and ABS

  From inverted yield curves to potential BBB downgrade risk, Barings’ David Nagle discusses some of the key challenges facing investors in the IG markets today.

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• Climbing High Yield’s Wall of Worry

  In this Q&A, Barings’ Head of Global High Yield, Martin Horne, weighs in on some of the major risks facing the high yield markets today and discusses where his team is seeing opportunities.

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• Assessing Today’s Private Credit Landscape

  Private credit markets have seen an increase in investor demand over the last decade. But with competition fierce and the cycle maturing, what factors should investors consider moving forward? Barings’ Eric Lloyd identifies where he and his team see the best relative value today.

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• Seeking Value in Today’s Private Credit Market

  In this Q&A, Barings’ Eric Lloyd discusses his team’s approach to navigating the risks and capitalizing on the opportunities across the global private credit markets.

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• How Opportunistic Is Your Investment Grade Allocation?

  Michael Freno, Head of Global Markets, discusses the benefits of 'multi-asset' or 'opportunistic' credit portfolios and the newly-launched Barings Global Investment Grade Strategies.

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