In the ongoing low-yield and complex regulatory environment, the search for alpha with capital consideration is increasingly essential for European insurance companies. Partnering with the right manager to get the most out of their fixed income investments – the bulk of their portfolio – is key.
Through a wide range of portfolios across the asset class spectrum - including government, investment grade and high yield debt, emerging markets debt, mortgage-backed securities and convertible bonds – Morgan Stanley Investment Management (IM) has provided extensive fixed income resources, infrastructure and capabilities for insurance clients.
In particular, Morgan Stanley IM has well established infrastructure and management techniques to manage return-on-capital optimised insurance solutions for active multi-asset fixed income. The firm has successfully raised £5bn in insurance assets since the introduction of Solvency II, making European insurance one of Morgan Stanley IM's most significant growth areas.
Judges acknowledged the asset manager's innovative approach to integrate Solvency II considerations into its fixed income investment processes, and described it as a "valuable effort" in understanding the needs and objectives of its clients while helping them optimise their capital.
As at 30 September 2019, 79% of the firm's fixed income assets were invested in strategies that outperformed their benchmark over the last 12 months, 100% over three years, and 91% over five years.
Richard Sarsfield, European head of insurance solutions for Morgan Stanley IM, said: "Our success as a fixed income asset manager for insurers is underpinned by integration of Solvency II's three pillar framework in what we do, along with our extensive breadth and depth of fixed income capabilities, and our proven track record in active management. We offer clients a wide range of suitable funds, and often create bespoke multi-sector fixed income portfolios for insurers which complement our clients' allocations, leveraging the best of MSIM's teams to ensure we deliver optimal solutions to our clients."