Dynamic debt investing – with Charlotte Vincent, co-head of fixed income at People’s Pensions

Charlotte Vincent, co-head of fixed income at People’s Pension, is the latest guest on The Professional Investment Podcast. She chose the FT’s story that the Iran war inflation shock is set to fall short of the 2022 surge. Charlotte explains she is always looking at inflation and its impact on fixed income assets as it is important to generate real returns for scheme members to ensure they have a good retirement. We discussed People’s Pension’s approach to fixed income and how they choose to make their portfolio dynamic when they appointed Invesco as their fixed income manager in February last year. Charlotte unpacks how the fund can change multiple aspects of the fixed income portfolio including the regional exposure, the duration of the portfolio, the mix between sovereigns and corporate. She talks about the benefits of their £250m collateralised-loan obligation portfolio and how helpful the floating rates have been in this very volatile fixed income environment. People’s recently split out the fixed income portfolio for its members in the growth part of their journey and those in the pre-retirement part of the journey. That has allowed them to tailor the fixed income investments to the very different requirements of these two cohorts. Finally, the two Charlottes discussed who will be the future buyers of UK gilts as closed defined benefit pensions wind down. Chalotte Vincent mentions a recent FT Alphaville article which suggested issuing more short-dated government debt. We finished our discussion pointing out the growing demand for global credit from both insurers and auto-enrolled workplace schemes and asked what can be done to encourage both the UK and European markets to increased fixed income securitisation. ⸻ ABOUT THE GUEST: Calum Cooper joined Hymans Robertson in 2003 as a graduate with degrees in software engineering and finance. He qualified in 2007, became a partner in 2011 and led our growing Trustee actuarial, investment and administration business for four years. These days he’s an owning partner sharing broad and unique pensions strategy, risk and digital expertise to clients to over £10bn. Calum brings a collaborative and creative approach to advice. Always with a focus on making progress against clear and shared long-term objectives. He has chaired our investment consulting leadership team and nowadays with responsibility for Pensions Policy he is a spokesperson for Hymans Robertson. Outside of work he is an enthusiastic cyclist and runner, rusty guitarist and a family man with two energetic boys Harris and Quin. ⸻ ABOUT THE HOST: Charlotte Moore is an award-winning journalist and co-founder of Moore Squared Communications. She has spent almost two decades writing about how the UK’s largest investment organisations allocate their capital for a number of different specialist magazines including Professional Pensions, IPE and MandateWire. She started this podcast to increase understanding of how and why the UK’s £3 trillion pensions industry invests its members’ capital to provide the best possible retirement. 🔗 https://mooresquaredcommunications.com/the-professional-investment-podcast/ Chapters: 00:00 Welcome and This Week's News Story 00:54 Why Real Returns Matter for Members 02:27 A Dynamic Approach to Fixed Income 05:05 CLOs and the Case for AAA 09:57 Splitting Growth and Pre-Retirement 14:23 Cutting Duration and Sovereign Debt 17:25 The Decline of DB and the Gilt Market 23:54 Private Credit, Global Credit and Europe #PensionProtectionFund#UKPensions#PensionsPolicy#RetirementIncome#ProfessionalInvestment