Conning Viewpoint: Private Placements May Offer Yield Boost to Portfolios

March 11, 2021

Sector’s Potential for Yield, Investor Protections and Customized Cash Flows May Be Worth Liquidity Trade-off


HARTFORD, CT – March 11, 2021 —Leading global investment management firm Conning has posted a Viewpoint discussing the potential opportunities private placements may offer insurance company portfolios. In an era of low interest rates, private placements may offer greater yields than public bonds of similar quality and duration along with greater investor protections and the ability to customize maturities to match an insurance company’s unique liabilities.


Viewpoint authors Matthew Daly, Head of Conning’s Corporate and Municipal Teams, and John Petchler, Director, Private Placements, explain what drives the sector’s higher relative yields and why insurers might consider making a consistent allocation to private placements in their corporate bond portfolios.


Petchler, who has been president of the Private Placement Investors Association since 2013, explained that “the sector’s illiquidity, the greater complexity of its issuance, and a desire among issuers for privacy and/or avoiding SEC registration are all factors that allow investors to command a higher yield for private placement securities.”


He adds that the sector offers investors safeguards should a private placement security underperform, and that its wide variety of maturities may enable insurers to find specific maturities to match their unique liability needs. These features, plus the yield premium, may be worth an insurer trading some portfolio liquidity.


Daly added that “larger insurers generally have greater exposure to this sector and have effectively addressed liquidity issues. Small- to mid-sized insurers may be able to leverage opportunities in private placements by working with investment managers that can help them assess their liquidity needs and have the requisite experience, capabilities and access to deal flow.”



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About Conning


Conning ( is a leading investment management firm with approximately $198 billion in global assets under management as of December 31, 2020.* With a long history of serving the insurance industry, Conning supports institutional investors, including insurers and pension plans, with investment solutions, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America.



*As of December 31, 2020, represents the combined global assets under management for the affiliated firms under Conning Holdings Limited and Cathay Securities Investment Trust Co., Ltd. (“SITE”). SITE reports internally into Conning Asia Pacific Limited, but is a separate legal entity under Cathay Financial Holding Co., Ltd. which is the ultimate controlling parent of all Conning Holdings Limited controlled entities.





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