January 14, 2022

By John Petchler, CFA, Director, Private Placements

 

Conning clients saw strong relative value in private placements in 2021 and committed nearly 50% more dollars to the asset class than in 2020. This was the second consecutive year of substantial increases from Conning clients, and as we begin 2022 we continue to see opportunities in the sector along with expectations for a more diverse issuance pipeline in February after the annual industry conference.*

 

One of the regulatory changes in the private placement market for 2022 that we are following closely is a new rating filing requirement by the NAIC’s Securities Valuation Office (SVO). Effective 01/01/22, for any newly issued private placement that is purchased after this date, the insurance company completing the regulatory filing for this asset as lead purchaser must file with the SVO a copy of the rating agency rationale that was issued accompanying the purchase, assuming there was a private letter rating. Conning, as an experienced private placement asset manager, has always performed this service for its private placement clients when we have been lead investor on a deal and will continue to do so.

 

Click below to continue reading Conning’s Regulatory Update, “Private Placements Interest Grows; Conning Managing New NAIC Requirement for Clients."

 

 

Disclosure
©2022 Conning, Inc. All rights reserved. The information herein is proprietary to Conning, and represents the opinion of Conning. No part of the information above may be distributed, reproduced, transcribed, transmitted, stored in an electronic retrieval system or translated into any language in any form by any means without the prior written permission of Conning. This publication is intended only to inform readers about general developments of interest and does not constitute investment advice. The information contained herein is not guaranteed to be complete or accurate and Conning cannot be held liable for any errors in or any reliance upon this information. Any opinions contained herein are subject to change without notice. Conning, Inc., Goodwin Capital Advisers, Inc., Conning Investment Products, Inc., a FINRA-registered broker-dealer, Conning Asset Management Limited, Conning Asia Pacific Limited, Octagon Credit Investors, LLC and Global Evolution Holding ApS and its group of companies are all direct or indirect subsidiaries of Conning Holdings Limited (collectively “Conning”) which is one of the family of companies owned by Cathay Financial Holding Co., Ltd. a Taiwan-based company. C# 14260659

*Past performance is not a guarantee of future results

Risks
Market Risk – Market, or systematic, risk is the risk that individual securities may be correlated with general market downturns regardless of the particular business conditions and outlook for the individual companies

Credit Risk – Eroding fiscal health in issuing companies resulting in inability to meet debt obligations

Inflation Risk – Inflation erodes the purchasing power of future cash flows from investments. In times of high inflation the value of securities may be reduced

Liquidity Risk – Liquidity risk can occur when market conditions do not allow transactions to be made in a quick and orderly fashion in relation to indicative market prices