The timing and the shape of the recovery post the pandemic remains uncertain. However, private debt offers an essential source of liquidity and long-term finance as banks continue to exhibit low-risk appetite.
The strong recovery of financial markets in recent months has far outpaced the real economy’s more mixed rebound. We show that a broadly similar divergence has been a feature of every U.S. recession for more than 50 years. Furthermore, the timing of such divergences has typically been a powerful signal of a forthcoming macro recovery.
Insurance credit and equities: Credit investors to benefit from regulatory intervention on dividends
A high relative dividend yield has traditionally been a key attraction for equity investors in the insurance sector. This has particularly been the case in Europe given the backdrop of a low (and declining) yield environment over the past ten years.
With global growth having collapsed under the impact of the coronavirus, rating agencies have been swift to downgrade companies, with many sizeable issuers already falling into high yield and more are expected in the coming months. Rather than a threat, this could be an attractive opportunity for canny investors.