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Credit will gain traction over 2012: Bentham
Credit investment manager Bentham Asset Management says Australia's low-growth environment will see investing in credit gain traction over 2012.
The boutique fund manager has signed off on four new super mandates worth over $120 million in the last quarter from Intrust Super ($20 million), AvSuper ($20 million), Media Super ($50 million) and Health Industry Plan ($30 million), increasing Bentham Syndicated Loan Fund's funds under management to over $2 billion.
Bentham said super funds were increasingly looking at defensive assets to ensure a return and to reduce exposure to volatility, especially in light of lower GDP growth over the coming financial year.
Treasurer Wayne Swan forecast economic growth of 3.25 per cent over the financial year, while the Reserve Bank predicted slightly less modest growth of 3 per cent.
Bentham managing director Richard Quin said the super funds were attracted to Bentham's yield and senior secured nature of loans.
He said investments at the top of the corporate capital structure, such as credit, were now a higher priority on a company's cash than equities.
"Companies are reducing debt in the face of a low-growth environment and higher borrowing costs," Quin said.
Credit provides diversification and "fills a gap between the extremes of low risk/lower growth in cash and term deposits and high-risk growth dependent equities," he said.
He said credit was more resilient than equities, and a diversified portfolio that delved into local and global credit investments would attract a stronger income stream.
Bentham Syndicated Loan Fund was one of only a handful to retain their five-star rating in Standard & Poor's 2011-2012 Global Fixed Income Sector.
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