Pictet AM nears peak AT1 bonds allocation as banks recover from 2023 crisis

'Everybody hated the asset class'

Pictet Asset Management has loaded up on Additional Tier 1 bonds after divesting from the asset just weeks before the collapse of Credit Suisse last year.

The $252bn asset manager slashed its AT1 bond exposure at the end of February last year, just weeks before the government-backed takeover of Credit Suisse by UBS led the Swiss regulator to wipe out $17bn worth of the struggling bank's AT1 bonds. This led to some market participants to deem the AT1 bonds market - which at the time held $260bn in assets - 'uninvestable', while other investors perceived the sell-off as a buying opportunity. Government-supported buyout wipes out $17bn in Credit Suisse bonds Pictet began adding AT1s back into its key long strategies in November, jumping...