Alternative Credit Should Have Pivotal Role


    Alternative credit should play a pivotal role in client portfolios, says a Towers Watson ‘Canadian Digest.’ Instead, however, it tends to be underexploited, both in terms of asset allocation and the implementation options selected. Notably, alternative credit can play a role in helping to reduce the reliance on the equity risk premium to drive investment returns and, as such, help to improve investment efficiency and portfolio robustness. Investors have historically accessed alternative credit through hedge funds or small off-benchmark allocations within existing traditional fixed income mandates. In recent years, dedicated alternative credit specialists and strategies have emerged, making it more accessible.