Inflation-linked bonds boost Ardea inflows

Eyeing offshore opportunities

By Christine St Anne
Mon 08 Feb 2010

The fixed income manager plans more product launches on the back of increasing investor appetite for inflation-linked bonds.

Ardea Investment Management has secured half a billion dollars of funds under management on the back of investor demand for inflation-linked bonds.

The firm was established in 2008 by former Credit Suisse principals Ben Alexander and Andrew Bartlett. The firm secured its first wholesale client in 2009 and now has three wholesale clients.

"Investors are increasingly becoming concerned about the impact of inflation on their portfolios. Many investors are worried that central banks around the world will not be aggressive enough in fighting inflation," Ardea principal Ben Alexander said.

The firm also plans to launch new inflation-linked products, including a pooled fund and a global inflation-linked bond portfolio.

Some of the domestic inflation-linked funds will be managed in a core-plus style, meaning it will opportunistically invest in offshore markets, Alexander said.

Alexander said investors will remain interested in products that protect them against inflation risks, particularly inflation-linked bonds.

"Other asset classes can offer protection against inflation, including property and commodities. However, these asset classes are only effective against inflation in a strong economy," he said.

"Inflation-linked bonds hedge against inflation in all economic cycles."

Alexander also welcomed the government's move to resume issuing inflation-linked bonds.

"The government had stopped issuing these bonds to the market back in 2003. A lot of investors are now happy that the government is providing a market for inflation-linked bonds," he said.

Go to today's InvestorDaily news

More stories by this author