ING Senior Loans

Philosophy

This is an actively managed, ultra-short duration floating rate income strategy that invests primarily in privately syndicated, non-investment grade, secured senior loans. Senior loans, also known as corporate loans, are floating rate instruments that can provide a natural hedge against rising interest rates. Senior loans are typically secured by a first priority lien on a borrower's assets, resulting in historically higher recoveries than corporate bonds. The strategy may be employed with or without leverage.

Objective

Provide superior long-term risk-adjusted total returns with low volatility over a full market cycle.

Process

The strategy invests primarily in non-investment-grade senior loans because they generally offer attractive yields, are typically secured by borrower assets, and are not subject to traditional interest rate risk. We target the top-tier of the non-investment grade senior loan category. Portfolios managed in accordance with the strategy are highly diversified across issuers and sectors. Our investment process utilizes top-down analysis to target industries with strong operating momentum or improving credit conditions, while avoiding those sectors prone to the clustering of defaults. The other major component of our process, specific borrower selection, is based on fundamental credit analysis that includes independent credit research, relative value analysis, and often, direct contact with management. Overall, our portfolio management process focuses on fundamental credit analysis, relative value assessment and high levels of diversification.