AllianceBernstein, which manages $235 billion for institutional clients around the world, is building up its London-based fixed-income team as part of an effort to capture more business from U.K. pension funds, says Ivan Rudolf-Shabinsky, director of business development and consultant relations. The London credit team consists of about 11 portfolio managers and analysts in total. AllianceBernstein is seeking to increase that number to about 16-17.
The firm, which manages $7 billion in fixed-income assets out of the London office, is in the market for two senior portfolio managers, two credit analysts, a quantitative analyst and an economist. AllianceBernstein has some pension clients, but once the firm staffs up it will be able to make an impact on the changing U.K. pension fund market, says Rudolf-Shabinsky. The firm concentrates on retail and insurance clients.
"The pension world is realizing they need to do something that isn't just an interest-rate or a duration play," says George Blunden, senior v.p. and portfolio manager at the fund. U.K. pension funds are increasingly looking at buying corporate bonds instead of remaining married to government bonds and are beginning to study fixed-income investments on a global basis--not just in the U.K., adds Blunden.
Over the past few years, U.K. pension funds have been gradually allocating more assets to bonds, to better match their assets and liabilities. Whereas a few years ago, the average pension fund would devote 10-15% of assets to fixed income, it is now 20%, says Rudolf-Shabinsky. And that allocation to fixed income is expected to continue to grow to almost 40%, which is in line with the allocation of many U.S. pension funds.