The Luxemburg-domiciled vehicle has been seeded by €100m, while the managers plan to construct the portfolio based on a combination of their own top-down views and analysts’ bottom-up recommendations, with a focus on risk management.
The fundamental credit research will focus on issuer credit quality and includes a detailed analysis and monitoring of the cover pool by a dedicated covered bond analyst.
“The market for covered bonds has grown very rapidly as covered bonds have established themselves as a major source of funding for banks in the current financial turmoil,” said Jansen, who is head of investment grade credit.
“Additionally, they enjoy institutional support evident in the launch of a second ECB covered bond purchase programme of €40bn and low risk weightings. This institutional support has positively impacted the asset class and spurred interest from investors.”
ING IM currently manages some €1.4bn in covered bonds as a dedicated investment strategy.
