News / Convertible bonds at LAZARD: Reduce market pitfalls, take part in equity upsides

Convertible bonds at LAZARD: Reduce market pitfalls, take part in equity upsides

Convertible bonds are a form of financing arrangement that allows investors to begin as a lender and potentially end as a shareholder due to their embedded equity option. They have earned dedicated allocations in institutional portfolios and, as such, we believe these securities start to represent a distinct asset class.

The risk-return profile of convertible bonds stands out versus other asset classes. Their fluid identity is their strength, as they generally exhibit bond-like characteristics in declining equity markets, and equity-like characteristics in rising ones. It follows that the bond should be analysed in the market environment context to determine its investment profile at a particular time and relevance to an investor’s objective. This analysis requires skill and experience, as it calls for technical, fundamental, and tactical analysis. Done well, the potential benefits to investors can be consistent and meaningful.

The global universe of convertible bonds currently consists of about 1,000 securities valued at $400 billion to $500 billion, with issuances focused on the United States and Europe.

In the session, we will start by reviewing the convertible bond market characteristics and its specific features. We will comment on the convertible bonds year-to-date behaviour and explain their strong performances. We will focus on the primary market and its potential evolution, accelerating or slowing down, as well as its impact on the valuation in the secondary market. Part of the presentation will address the management of the asset class at LAZARD.  Then, we will focus on the current positioning of our portfolios regarding the main performance drivers of the asset class, the different geographical areas and sectors, as well as the rating and nature distributions. We will finish the session on the valuation of the convertible market and on our outlook for the asset class in the coming months.

About the speaker

Arnaud Brillois

Arnaud Brillois began working in the investment industry in 2000. Arnaud joined Lazard in Paris in 2008 as the Head of Convertible Bonds before relocating to New York in 2017. Previously, he was the Director of Alpha Fixed Income and Convertible Bonds Management at Natixis.

More news

Frequently Asked Questions

Frequently Asked Questions

How do I subscribe for FIF? Click the register here button, enter your information and follow the steps to register for the Break Out Sessions of your choice. How do I subscribe for the Break Out Sessions? When you subscribe for the event, you will get the option to select the Break Out Sessions of…

Read more
Value VS Quality – Terry Smith

Value VS Quality – Terry Smith

30.09.2020 – 13.30 Terry Smith graduated in History from University College Cardiff in 1974. He worked for Barclays Bank from 1974-83 and became an Associate of the Chartered Institute of Bankers in 1976. He obtained an MBA at The Management College, Henley in 1979. In 1984 He became a stockbroker with W Greenwell & Co…

Read more
Challenges and trends in the B2B funds market according to EY

Challenges and trends in the B2B funds market according to EY

New digital technology, regulations and a limited increase of assets under management: the B2B funds research under the supervision of consultant EY maps the latest developments and trends. In the coming months, the B2B funds market can expect steady growth. But the industry is also being confronted with a number of important challenges, says Filip…

Read more

Fund Insiders Forum uses cookies. Read our cookies policy.