Acrossthe divide
A recommendation by Watson Wyatt to its pension clients that they start takinghigh-yield investment opportunities more seriously may herald the start of a sea change in the strategies of pension funds, traditionally the most risk-averse and conservative members of the investment community. Philip Moore reports
Up until recently, if you had advised any European pension fund manager to invest in high-yield bonds, you would have been laughed out of the building. But in July this year, pension investment consultant Watson Wyatt flew in the face of accepted wisdom and recommended that pension funds invest in high yield. And if Watson Wyatt’s clients heed the advice, the European high-yield market could be set for a period of healthy growth.
The recommendation appeared in a paper distributed to Watson Wyatt
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