Senior secured loans: why now?
Many of the most commonly used fixed income investments, such as high-quality government bonds, generate negative or low real returns in today’s high inflation environment. Consequently, these investments pose a significant duration risk to portfolios.
Despite inflation expectations being anchored, inflation remains high, and the US Federal Reserve has signalled a hawkish stance to keep rates higher for longer.
We believe the current uncertain market environment calls for fundamental changes in asset allocation in order to meet long-term real return targets.