Fund financing: an innovative investment solution for insurers

Shelley Morrison, Senior Portfolio Manager, Fund Financing at Aberdeen Standard Investments, discusses an innovative and customisable investment strategy for insurers who are seeking to extract greater yield from short-duration assets.

Clear Path Analysisposted on Thursday, August 27, 2020

The ongoing search for yield may seem like a never-ending quest for Insurers and against this backdrop 2 trends are emerging:

  • Firstly, the move into private credit investing and
  • Secondly, insurers are aiming to squeeze out additional income from their existing asset base.

One area that has had less focus, is the high cash balances and money market fund investments on balance sheets. Insurance companies are questioning if they need access to liquid funds on an overnight basis or if there are other ways to find yield from short-duration assets. We believe that Fund Financing represents an avenue where insurers can put these assets to greater use. This €350 billion  universe is under-exploited and provides a yield-enhancing investment opportunity for insurance companies.

To read the full opinions of our Fund Manager, Shelley Morrison, read the full white paper here.

 

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