Aegon AM launches financial credit fund, targeting bank capital securities
What's the deal? Aegon Asset ManagementDealroom has a profile for this one. Try Dealroom → has launched the Aegon Financial Credit Opportunities Fund, a strategy investing in capital securities from global banks and financial institutions. It aims to deliver steady income with the potential for capital growth.
How it works: The fund will hold a concentrated portfolio of around 40 to 100 securities, with at least 65% in Contingent Convertibles (CoCos). It is expected to carry relatively low sensitivity to interest rate risk.
The portfolio targets subordinated debt instruments issued by financial institutions globally — complex assets typically issued by large, well-established institutions with strong investment grade ratings at issuer level.
Who's running it? Investment manager Alex Pelteshki and head of UK fixed income Iain Buckle will manage the fund, supported by four dedicated credit analysts. The team will use a proprietary strategy focused on overlooked opportunities with asymmetric return potential.
Why now? Aegon frames capital securities as a rapidly evolving and increasingly important market segment that warrants a dedicated allocation. It cites the high-quality, closely regulated nature of issuers and the securities' diversification benefits relative to corporate credit.
"As we build on our fixed income expertise and offering, creating a dedicated strategy designed to provide targeted exposure to financial credits ... was a natural next step," Buckle said.
Pelteshki added that capital securities "can represent a compelling opportunity — particularly for investors focused on generating income, whatever the market environment."
The signal: Bank capital instruments like CoCos have long sat as a niche allocation within broader bond funds. Aegon's move to carve out a standalone strategy signals growing conviction that the asset class deserves dedicated attention from income-focused investors.
Image credit: James Willamor
