How is your group set up? Who are the other portfolio managers?
We have a team that is dedicated to the loan asset class. It consists of six professionals--four of whom, including myself, are portfolio managers. The four PMs have between 15 and 20 years of experience apiece. Robert Dial, Mark Campellone and David Melka are the other PMs. We're supported by two experienced credit analysts. Importantly, we benefit from being part of NYLIM and regularly tap into the substantial resources of the firm.
Where do you see New York Life's future?
We currently manage $2 billion in loan assets for both the parent company New York Life Insurance Co. as well as several collateralized loan obligation funds. We've had nice growth over the last five years in our institutional business and we recently entered the retail market with the MainStay Floating Rate Fund. I would anticipate that we would continue to expand our institutional and retail product offerings over the next five years.
Is this your first floating rate fund? Why did you choose to launch it now?
Through the MainStay Floating Rate Fund, NYLIM is offering retail investors access to our investment management expertise and capabilities in the senior secured floating rate asset class. The fund seeks to provide investors with high current income and a nice stable NAV. It is our first retail offering in this asset class. We think now is a wonderful time for both the asset class and also for investors to consider investing a portion of their fixed-income dollars into a product that should perform quite well in a rising-rate environment. We clearly expect interest rates to go up. This is a product that performs best not just when interest rates are increasing but also when the economy is either improving or is stable. We have a fairly favorable outlook with respect to the economy and we think defaults should remain fairly low over the next several years.
What are some challenges you face in the current environment?
With credit spreads at five-year lows and secondary prices above par, finding attractively priced paper is a challenge. We're looking for yield-enhancing opportunities wherever we can find them as long as the risk profile remains acceptable. We're optimistic that new issue volume will alleviate pressure on spreads in the coming months.