FIXED INCOME & INFRASTRUCTURE

PGIM Private Capital’s long experience in private placements has resulted in outperformance versus public bond benchmarks and a favorable loss experience.

INVESTMENT GRADE: PRIVEST  

PRIVEST is an Insurance Company Separate Account organized under a group annuity contract. It is a commingled vehicle that has been in existence since 1976, and focuses on high quality, investment grade private placement investments. PRIVEST is only available for investment by qualified U.S. pension plans.

Investment Objective

  • Targets +100bps over Barclays Global Aggregate Index
  • Also aims to outperform the Barclays US Credit Index by +100bps
  • Inception to date since 1976, has outperformed the AGG by +149bps, US Credit by +93bps

Approach

  • A-/BBB+ average quality at origination (BBB+ average)
  • Diversification within sectors relative to the Barclays U.S. Credit Index
  • Focused on U.S. traditional private placements to middle-market issuers, with up to 25% of the portfolio invested in non-US issuers

Portfolio Characteristics

Market Value: $6,912.3 million
Average Issue Size: $13.2 million
Average Life: 7.2 years
Modified Duration: 5.7 years
Portfolio Average Quality:  BBB+
Number of Issues: 487
Number of Issuers:  316

Quality Distribution1

Cash: 2.4%
AAA/A+: 5.3%
A/A-: 26.0%
BBB: 63.3%
Below Investment Grade: 3.0%

Sector Distribution

Industrial: 65.5%
Utility: 19.5%
Finance: 15.0%

BELOW INVESTMENT GRADE: PRIVEST PLUS 

PRIVEST Plus is an Insurance Company Separate Account organized under a group annuity contract. It is a commingled vehicle that has been in existence since 2004, and focuses on high quality, high yield private placement investments. PRIVEST Plus is only available for investment by qualified U.S. pension plans. 

Benchmark: BofA Merrill Lynch BB-B U.S. High Yield Constrained Index 

Strategy 

  • BB+ focus (Lower Investment Grade, High Yield, and up to 10% “distressed” sleeve) 
  • Focus on fixed-rate U.S. traditional private placements to middle-market issuers (full call protection) 
  • Industrial concentration 

Terms 

  • Open-ended commingled insurance company separate account 
  • Quarterly contributions / withdrawals

 

 

Portfolio Characteristics 

Market Value: $742 million 
Average Issue Size: $9.7 million 
Average Life: 4.5 years 
Modified Duration: 4.0 years 
Portfolio Average Quality: BB+ 
Number of Issues: 76 
Number of Issuers: 60 

Quality Distribution 

Cash: 2.9% 
Treasury: 0.2% BBB/BBB-: 30.5% 
Below Investment Grade: 66.4% 

Sector Distribution 

Industrial: 70.0% 
Utility: 23.1% 
Finance: 6.9% 

INFRASTRUCTURE DEBT 

 

$26.2 BILLION

ASSETS UNDER MANAGEMENT

SEPARATELY MANAGED ACCOUNTS

 

Strategy 

  • Investments are available through PPC’s registered investment advisor, Prudential Private Placement Investors, L.P. (“PPPI”) via a co-investment program with Prudential Financial Inc’s General Account.
  • Focus on traditional private placements in investment grade and below investment grade to middle market issuers globally
  • Highly disciplined credit culture and heritage
  • Industrial Concentration

Terms 

  • Customizable accounts subject to the client’s objectives, which include various investment guidelines or restrictions
  • Investment guidelines may include quality, currency, sector, tenor, issuer, industry, size, etc.

NON-USD INVESTMENTS

 

PGIM Private Capital has offices in London, Frankfurt, Mexico City*, Milan, Paris and Sydney**, and follow the same strategy used in the U.S., with a regional office network focused on building relationships with middle-market companies seeking long-term, fixed-rate debt. 

Options are available in a variety of currencies. 
 

Pricoa Sterling Corporate Bond Fund 

  • The Pricoa Sterling Corporate Bond Fund is a Qualified Investor Fund that closed with an initial commitment of £300 million in 2012 
  • The Sterling Fund invests in private placement investments originated outside of the U.S. and denominated in pounds sterling 
  • The Fund is closed to new investors, but other options to qualified institutional investors outside the U.S. are available

INVESTMENT TEAM
 

Al Trank
Executive Managing Director
Portfolio Manager
Phone: 973-802-8608
Email: click here to contact
Territory: All

Allison Lam
Senior Investment Associate
Phone: 973-367-7073
Email: click here to contact
Territory: All

 

 

 

1. Duration adjusted with the exception of Inception returns.

*As of 12/31/18

*Operates through PGIM Real Estate Mexico S.C. 

**Operates through PGIM (Australia) Pty Ltd.