Building a Diversified Credit PortfolioBuildingaDiversifiedCreditPortfolio

Overview

A pension plan sought more yield without significantly increasing risk. 

Key Partners 

• Large pension plan
• PGIM Multi-Asset Solutions (PMA)

Challenge

A large pension plan was seeking a $2 billion total return credit mandate, with a return target above a specified benchmark. The plan sought a solution that would provide sufficient liquidity to meet plan payments, and was unfamiliar with investing in private assets.

Approach 

PMA partnered to further understand the plan’s needs, risk tolerance, and liquidity requirements to define an “investible universe” of assets. We leveraged these inputs to design a preliminary multi-asset-class portfolio as a starting point for further exploration. The plan used the opportunity to test ideas and refine their appetite for certain asset classes and investment limits.

Solution 

PMA crafted a portfolio allocation including solutions across PGIM. We presented a new solution based on the pension plan’s feedback, leveraging public and private assets including access to securitized products and proprietary private asset origination. The solution also provided a list of identified strategies of interest for future opportunities. 

 

^{Case studies are provided for illustrative purposes only and results may vary.}