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Since their introduction in 2013, AT1 bonds have acted as a valuable kicker for many fixed income funds, having consistently delivered excess return over more mainstream credit markets such as high yield bonds over the medium term.

Negative headlines around private credit have intensified this year, driven by the AI-related software sell-off and the news that most players have restricted withdrawals from retail private credit funds.

The terms private credit and life insurance have appeared together in multiple negative headlines in recent weeks, and to casual observers the link between the two may not be immediately obvious.

In 2017, when the Federal Reserve (Fed) was preparing to shrink its balance sheet, then-chair Janet Yellen famously described the process of quantitative tightening (QT) as being "like watching paint dry."

This year will go down as an important period for the European insurance sector, which is concluding its effort to phase out capital instruments issued under the old Solvency I framework and replace them with more modern Solvency II structures.

Earlier this month, we wrote about the high cost of staying in cash in the Euro market. In that note, we argued that a combination of inflation, low front-end rates and steeper curves, favoured a rotation out of cash and cash like instruments into other alternatives that delivered better real returns, including credit. Building on this argument, we wanted to extend this perspective to the US dollar market and highlight a few key points.