Banner Curve

In a rapidly shifting global market, skilled active security selection and asset allocation are more important than ever to capitalize on opportunities.

At PineBridge, we focus on strategies that generate alpha for clients, and we seek to do so across a wide range of fixed income markets. We deliver alpha in investment-grade bonds from developed markets, in emerging market (EM) debt, and leveraged finance via our multisector fixed income platform. We apply our collaborative, high-conviction approach to each and every one of these strategies.

Banner Curve

The team’s structure enables cross-sector information-sharing and nimble portfolio positioning, which generates results for our clients. Our investment professionals are specialists in their areas, and our communication infrastructure links our investment teams across the globe.

With teams in Taiwan, Singapore, Hong Kong, Tokyo, London, Santiago, Los Angeles, Houston, and New York, we cover the world, and we have the expertise on the ground across both developed and emerging markets to evaluate risks and various sources of return.

Our internal credit analysis platform, known as CAP, enables 24-hour coverage of markets and allows us to respond to changing events and potential shifts in our portfolios in real time. Whenever any analyst has updated his or her credit recommendations, it’s captured in the system, and the entire team is alerted.

“No matter which time zone I’m in, I’ll receive an update from the analyst,” says Arthur Lau, Co-Head of EM Fixed Income. “Because of this, we’re able to position our portfolios before the market can and capture the most significant part of capital appreciation. We believe this clearly demonstrates PineBridge’s edge.”

We also hold regular fixed income investment forums, meeting daily, weekly, and monthly to review the latest movements in the markets, along with our positioning. Our monthly forum includes all asset classes across PineBridge, and all of these interactions enable real-time collaboration among our teams and yield a variety of benefits, most notably our ability to form a complete picture of a credit.

Banner Curve

Our process and philosophy is reinforced by regular, formalized knowledge sharing between our teams of fixed income experts.

Banner Curve

For illustrative purposes only. We are not soliciting or recommending any action based on this material.

Banner Curve

These partnerships extend to how we conduct due diligence. “When we meet with a company, the equity and bond analysts attend together, making sure we get a holistic view – the complete story. The company may say something that pleases the equity investor and not the credit investor, but if both sides of our team are aligned, we can get the best assessment of the company’s position,” according to Lau.

A key part of our company values that makes this communication viable is the openness in expressing opinions, debating points of view on positioning, and collaborating in our investment forums. This is the essence of our culture and something we place great importance on when recruiting new investment professionals.

Banner Curve

Speaking the same language

In order for our investment professionals to effectively collaborate, they must be able to discuss investment opportunities in terms that everyone in the company can understand. While each segment of our investment platform has specialized research capabilities to help each team assess the nuances of their market, we share a common language: our Fundamentals, Valuations, and Technicals (FVT) approach to security selection.

We evaluate each of these factors both across and within asset classes. We use this approach to identify risk, evaluate how that risk will evolve, layer on the market’s view of that, and then finally give shape to our overall relative value perspective.

“That’s what effectively creates the buy/sell recommendation,” Oh says. “Whether it’s at the security level or the broad macro level, it’s ultimately about how we see the risks, how we manage those risks, and how we get paid for those risks within the portfolio. You can apply that principle to any asset class.”

Through our independent, proprietary review process, portfolio managers crystalize their view on the potential impact of shifts in security exposures in light of analysts’ recommendations and overall market sentiment. As part of this approach, we incorporate analyst risk ratings and relative value rankings. All analysts use these metrics each time a credit is discussed or recommended, either in the monthly forums or via CAP. These rankings are reviewed sector by sector – either monthly or bi-monthly, depending on the size of the portfolio – and help determine positioning and prospective shifts.

Banner Curve

Spanning the world

A core strength of our organization is our fixed income breadth. Our proven capabilities across the spectrum position us to deliver results through specialized and core strategies alike. Our strategies and teams are recognized across the industry for performance excellence, including senior loan manager of the year from Institutional Investor magazine for our leveraged finance team1.

The leveraged finance market provides one example of the edge our integration and communication deliver. “One of the most noticeable developments in our world in recent years is the increasing share of cross-border transactions,” Lim says. Most of the market used to consist of US issuers issuing leveraged loans in Europe. But after around 2012, Europe-centric businesses began issuing bonds and loans in the US.

“For example, for a German cable company that has no dollar revenues but is issuing debt in the US, we have a local team covering the German and French cable operators. But we may well own the loans and bonds in Europe and in the US. This is very useful for disseminating information. If a new development happens, it would come out in local time, and our US office would immediately be in the loop, thanks to our European team,” she says.

This collaborative approach extends further, with industry views formed by industry analysts working together across regions. “They will review, for example, the health care sector in the US and look at all the positions we own and do not own. We’d extend our analysis to the European health care sector and examine the holdings by European issuers. There’s an ongoing dialogue between the analysts so that this is a natural exercise and one that happens regularly due to the communication infrastructure we’ve established around the world across our teams,” said Oh.

Market movements can also offer opportunities to buy at a discount, according to Cook. “Volatility brings dispersion to markets, creating new opportunities to invest in assets at attractive valuations. We rely on our integrated team and process to help us position portfolios to benefit,” he says.

This culture of collaboration extends to our approach to environmental, social, and governance (ESG) considerations, a component of our investment process. For the developed markets fixed income team, this ESG component provides an extra layer of insights that helps form portfolio decisions.

Banner Curve

In one example, collaboration between our US and Hong Kong teams helped to add an additional layer of insight into our credit assessment of a Southeast Asian financial institution’s very first ESG-themed bond offering.

“We identified a rather challenging information gap relating to the issuer’s financial health in its home market and its need for additional liquidity. We turned to our team in Hong Kong, who provided local knowledge into the issuer’s access to non-ESG-themed sources of funds in its domestic market – information that is not necessarily covered in the second-party opinions released during an issuer’s roadshow,” says Alessia Falsarone, Head of Sustainable Investing and Senior Portfolio and Risk Strategist for Developed Markets Fixed Income.

Featured Banner Image
Banner Curve

Our heritage of ESG integration

While demand has risen for ESG strategies in the market in recent years, “for us, ESG integration started much earlier at the portfolio levels,” according to Falsarone. “It’s in line with our culture of risk evaluation and alignment of the sources of return we seek, with an understanding of the risks that are embedded in particular exposures to issuers or to macro themes. For instance, you cannot evaluate a technology company unless you discuss the semiconductor supply chain in Southeast Asia, the nuances of cybersecurity law in China, and IP protection in developed markets. It just simply wouldn’t work.”

Banner Curve

Corporate responsibility and disclosure are priorities – and in some cases, requirements – for investors in emerging and developed markets in equal measure. The diversity of the investible market, particularly with the multitude of countries that encompass EM, demands an active, credit-intensive, and selective approach. That means investors have to engage with company management teams to assess the corporate culture and controlling influences. These are common factors in our ESG approach for both emerging and developed markets.

PineBridge’s heritage of ESG integration and specialization within sectors and strategies has enabled us to develop our own internal ESG scoring system for companies around the globe. We track the evolution of our ESG scores over time to see whether the company has changed or whether our investment decisions are in sync with our ESG scoring.

Banner Curve

Positioned for opportunity

Overall, we believe our fixed income platform is particularly well positioned for opportunity, fueled by our flexibility to pursue opportunities in the market that others may miss.

“We’re a nimble manager in a world where many managers have become gargantuan,” Oh says. “Mega-managers are pushing indexing because they no longer have the ability to add value given that they ‘own’ the market. Not only do we operate in strategies that have the potential to create better outcomes, we are sized to not own the market and are able to position to generate that alpha.”

We’re also uniquely positioned through our multi-asset credit capabilities. Global credit markets are facing headwinds that may prevent many traditional investment approaches from delivering the results asset owners need to meet their liabilities. So flexible strategies like these are more important than ever.

“Global fixed income markets are constantly evolving, creating inefficiencies that cause prices to dislocate from their fair value,” according to Oh. Our integration and collaboration allow our teams to keep pace with these dynamics in real time and position our portfolios accordingly.

1 Third-party rankings and recognition from rating services or publications are no guarantee of future investment success. Working with a highly rated advisor does not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation. Generally, ratings, rankings, and recognition are based on information prepared and submitted by the advisor, and are part of a process in which not all advisors elect to participate. A more detailed disclosure of the criteria used in making these rankings can be available upon request.