Bond Investment for Tough Times
Martin Horne recently spoke with IPE about his outlook for credit, what we can expect in the new era for fixed income and what sets Barings apart.
Martin Horne is the new global head of public assets at Barings bond investor, but he is a bond guy through and through.
“I am a credit guy by training and experience. You could say this makes me have a naturally pessimistic disposition, in the sense that credit guys are always looking for what may go wrong whereas equity guys are always looking for what will go right. But in spite of this fundamental bias in my makeup, I have to say I think for fixed income and credit investors an awful lot of things are going the right way right now and we are in a market that offers far more potential than first impressions may give.”
Positive outlook for credit
A large part of Barings’ asset management growth has been driven by new money from existing clients. “In my view, this indicates the quality of service and the level of trust which our relationships with them have delivered,” Horne says. “We maintain our edge by maintaining our relevance to our investors. We certainly don’t tell clients what to think about rate movements.”
He believes the opportunities for an idiosyncratic research-led approach to credit have never been better. “I don’t see as many over-leveraged companies in the classic cyclical areas of the market as we have seen in prior downturns. In many ways, any impending recession will be the longest talked about recession in history and this has led companies to take a more cautious approach and to run their businesses for cash. We have seen nothing like the excesses which preceded the 2008-09 downturn. This really does not look like a cliff-edge moment for me. Rather one of significant opportunities.”
