Structured Finance

Key characteristics: • Team-based collaborative approach • Extensive structured research experience and capabilities • Credit cycle-informed portfolio management approach • Risk-focused mindset

Structured Finance Overview

The Structured Finance team has navigated numerous investment cycles since the inception of the asset class in the late 1980s. The portfolio managers and research analysts have a repeatable process to evaluate creditworthiness and the relative value of investments in the structured finance universe.  

Aegon AM US Structured Finance

Strategy

AuM*

Inception date

Structured Finance   $8,840 million January 1, 2004

 *As of September 30, 2018

Philosophy

 Structured finance portfolio management is predicated on the following guiding principles:

  • Fundamental collateral analysis and structural durability are the primary drivers of return. Therefore, the firm employs a disciplined, bottom-up research process with dedicated structured finance analysts, collaborates with global credit research analysts on fundamental strength of issuers, and leverages real estate professionals from the firm’s affiliate company.
  • Unexpected changes in credit cycles create the biggest market dislocations. Therefore, the investment process is top-down aware, with consideration given to the house macro view and thematic views on markets. This approach allows the portfolio management team to rotate sectors and manage around market inflection points.
  • Broad diversification mitigates risks associated with individual issues. Therefore, to effectively manage liquidity and the risk profile of the asset class, the portfolio management team diversifies across issues, sub-sectors and credit quality.

Investment Process

The structured finance strategies employ a fundamental, asset level research investment process, which is complemented by proprietary top-down macroeconomic analysis and risk monitoring. This disciplined bottom-up approach emphasizes the analysis of fundamentals, valuation, sentiment and technicals.

Structured Finance investment process

Distinguishing Characteristics

The Structured Finance team structure, long-term focused approach, and risk-informed process differentiate the strategies from peers, specifically in the following areas: 

  • Team-based collaborative approach between portfolio management and research 
  • Extensive structured research experience and capabilities
  • Credit cycle-informed portfolio management approach 
  • Risk-focused mindset