Glasgow, Scotland-based Britannic Asset Management, which manages a total of £6 billion in fixed income, £4 billion of which is devoted to corporates, has been buying U.K. financials and telecoms and may add some energy names.
David Roberts, head of credit, says he is taking advantage of the sell-off at the long-end of the market and is selling five-year financial paper and buying 20-year financial paper. Recently, the long-end of the market has come down about 6% from its highs, he says. For example, Roberts bought Royal Bank of Scotland's 5 1/8% of '16 perpetual deal.
Roberts has also been increasing his allocation to Deutsche Telekom's longer-dated paper. Even though he is concerned DT may be downgraded, certain bonds have coupon step-ups to compensate. Roberts has also been adding to other telecom positions, for example British Telecom and KPN.
Britannic may add some utilities and energy names such as Talisman and BG Transco. Roberts says there is not much in the new issue market, at the moment, but he is considering the £1 billion Metronet deal. Britannic uses a variety of indices and also benchmarks its portfolio against its peer group.
