Franklin Templeton has announced the talent acquisition of Aviva Investors’ US-based Investment Grade Credit team. This means that senior portfolio managers Josh Lohmeier and Michael Cho will join Franklin Templeton Fixed Income (FTFI). In addition, Tom Meyers, previously Aviva’s Head of Americas Client Solutions, will join FTFI in a newly created role as SVP, Senior Director of Investments and Strategy Development, Fixed Income.
In a press release, the asset manager has revealed that Meyers, Lohmeier and the full investment team are expected to join by the end of 2021. Lohmeier and Meyers will report to Sonal Desai, CIO at FTFI, and the investment team will continue to report to Lohmeier.
The Investment Grade Credit team currently manages over 7.5 billion dollars in institutional assets under management at Aviva, across its suite of investment grade credit strategies, including US Investment Grade Credit, US Long Duration Credit, US Long Duration Government/Credit, and US Intermediate Credit, with additional customized versions of each strategy for various institutional clients. The asset manager has clarified that Aviva clients in these strategies will have the opportunity to continue to have the team manage their assets at Franklin Templeton.
“Bringing this experienced team aboard will complement our existing credit capabilities by further deepening our expertise in investment grade credit, strengthening our research and analysis resources, and expanding our strategy offerings and capabilities further into the institutional marketplace, with a special focus on defined benefit and liability-driven investing,” said Desai.
“I look forward to working with Josh and the team to bolster and differentiate our investment grade credit offerings, and with Tom to bring this messaging to our clients and consultants, especially in the institutional arena”, she added.
Excess returns through all market cycles
Franklin Templeton has highlighted that this Investment Grade Credit team uses a differentiated portfolio construction process that breaks down and analyzes credit markets in distinctive ways in order to uncover additional opportunities for alpha and risk reduction for clients. Utilizing a custom risk framework and allocation system, the team aims to consistently deliver positive and uncorrelated excess returns through all market cycles, regardless of the direction of credit spreads, with a focus on downside protection.
Lohmeier claimed to be “thrilled” to continue to grow the substantial client interest they have seen in their investment grade credit strategy, now with Franklin Templeton. “Portfolio construction sets the strategy apart from its peers and is a key driver of its non-correlation. Our time-tested process is designed to add value by creating a more efficient portfolio and allocating to the best credit ideas”, he said.
Franklin Templeton believes that the team’s approach and expertise are complementary to its existing active quant investment process, which combines fundamental research-based active management with quantitative analysis and data science. In addition, the team’s investment philosophy and culture, built on the belief that a quantitative enhancement to fundamental research leads to more consistent and repeatable alpha generation, strongly aligns with FTFI’s existing culture.
“In the current environment, and especially within fixed income, we believe clients are looking for crisp differentiation and consistency,” said Meyers. “I look forward to working with Josh to continue to articulate the benefits of the investment grade credit strategies, and with the broader Franklin Templeton Fixed Income team in connecting clients with investment strategies that meet their diverse needs.”
Franklin Templeton Fixed Income has 156 billion dollars in assets under management, with approximately 13 billion of that in corporate credit strategies, as of August 31, 2021. The firm’s existing Corporate Credit Research Team comprises 31 investment professionals, organized by region.
Por Funds Society, Madrid
