Securitized Products

Highly liquid issues backed by a mix of non-mortgage assets (ABS) as well as mortgage assets ‐ commercial (CMBS) and Agency and Non-Agency MBS ‐ that aim for higher yields than comparably rated corporate debt instruments while enhancing portfolio diversity.

Contact us to learn more.

Approach

Conning invests primarily in a broad range of high-quality securities with competitive yields relative to other comparably rated debt instruments that are consistent with a client's unique constraints. We seek opportunities to create an income or convexity advantage or benefit from a pricing dislocation. Fundamental and quantitative analysis of credit and prepayment risk identify relative value; we select securities meeting strict credit structure and risk standards.

Process

Securitized products offer higher yields, lower correlation to core assets, and favorable risk-adjusted returns. The market is highly liquid, with over $10 trillion in outstanding bonds. Investors can customize portfolios and benefit from structural protection and transparency in deals.

Yield Pick-up


  • Earn 50-200 bps over comparably rated fixed income

Diversification


  • Lower correlation to core asset classes
  • Exposure to collateral of industrial, consumer, and real estate loans

Risk Adjusted Returns


  • Favorable Sharpe ratios compared to core asset classes.

Liquidity


  • Liquid market comprising 26% of the U.S. bond market.
  • Over $10 trillion bonds outstanding.

Wide Variety of Choices


  • Ability to customize cash flows, yields, and durations for bespoke portfolios.

Structural Protection and Transparency


  • Deals structured to provide investor protection with excess spread, credit enhancement, and collateral.

Expert

Mike Nowakowski

Mike Nowakowski is a Managing Director and Head of Structured Products, overseeing trading of ABS securities. Prior to joining Conning, he was a portfolio manager focused on Agency MBS and ABS at GE Asset Management, State Street Global Advisors, and People’s United Bank. Previously, Mr. Nowakowski was a portfolio manager focused on Money Markets. Mr. Nowakowski earned a bachelor’s degree in Business from Plymouth State University where he graduated Magna Cum Laude.

Mike Nowakowski is a Managing Director and Head of Structured Products, overseeing trading of ABS securities. Prior to joining Conning, he was a portfolio manager focused on Agency MBS and ABS at GE Asset Management, State Street Global Advisors, and People’s United Bank. Previously, Mr. Nowakowski was a portfolio manager focused on Money Markets. Mr. Nowakowski earned a bachelor’s degree in Business from Plymou Read More...

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Risk Considerations

 
Investment Risk - The potentially complex structure of the security may produce unexpected investment results not based on default or recovery statistics.
 
Valuation Risk - Valuations of structured credit products are provided by third parties, based on models, indicative quotes, and estimates of value, in addition to historical trades. There is inherent difficulty in valuing these asets, and there can be no assurances the assets can be disposed of or liquidated at the valuations established, or that published returns will be achieved.
 
Underlying Asset Credit Risk - During periods of economic uncertainty, and recession, the incidence of modifications and restructurings of investments may increase, resulting in impairments to the underlying asset value.
 
Economic Risk - Changing economic, political, regulatory or market conditions, interest rates, general levels of economic activity, the prices of securities and debt instruments and participation by other investors in financial markets may affect the value of the structured security and all other asset classes.