Sanlam Hybrid Capital Bond increases exposure to banks

Fund is comfortable in the space

The manager of the £180.3m Sanlam Hybrid Capital Bond fund has upped its exposure to banks over the past year, having identified an opportunity in legacy paper.

Peter Doherty, head of fixed income at Sanlam, said typically a third to a half of the portfolio has been in insurers, with up to a quarter invested in banks, adding that this would have been the case a year ago. However, at the end of August this year, banks accounted for 54% of the portfolio, followed by insurers at 26%. Explaining what is meant by legacy paper, Doherty said: "It is paper which is hybrid, which has been issued previously under the rules and regulations framework from the regulator at that time. Subsequently now it is deemed, or will shortly… not qualify as capital b...