Pension fund Heineken announced in their recently published Annual report 2024, the appointment of PGIM for an asset backed securities portfolio. The pension fund writes about this:
‘The Trustee, on the recommendation of the Investment Committee, has appointed a number of investment managers to manage the assets of the Plan.
During the 12 months to 31 October 2024, the Trustee conducted a review of the Plan’s Corporate Bond mandate managed by Insight. Given credit spreads on investment grade corporate bonds were at levels that were tight by historical standards, the Trustee viewed there to be limited upside to the Plan’s funding position from any further credit spread tightening, whilst credit spread widening presented a material downside risk. The review determined that asset-backed securities (“ABS”) were an attractive asset class due to the much lower credit spread duration of an ABS portfolio versus an investment grade credit portfolio. The Trustee therefore decided to redeem £65m from the Corporate Bond mandate and reduce the credit spread duration of the remaining portfolio to mitigate the downside risks identified. The redemption proceeds were held in a money market fund within the LDI portfolio managed by Insight as at 31 October 2024.
After year end, the Trustee carried out an asset-backed securities (“ABS”) manager selection exercise and decided to appoint (PGIM) to manage a pooled mandate. The Trustee allocated £65m to this mandate. In the revised SIP, a new allocation to Liquid Credit has been introduced in the place of Corporate Bonds and corresponds to the combined ongoing target allocation to Corporate Bonds and ABS.’
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