This year's emerging markets (EM) manager of the year, Loomis Sayles, looks at the EM debt opportunity as offering a diversified source of high-quality carry, which is particularly critical for insurance companies, and favourable total return opportunities over a market cycle. It also offers a short-duration strategy which has been attractive to UK-based Lloyds insurers with shorter duration liabilities.

The asset manager customises the wide-ranging, distinctive constraints on quality, duration, country limits, ESG and other factors to fit each insurer's unique need, frequently providing clients with updates on spread relationships between emerging and developed markets at the index level, to quantify the yield pick-up. It breaks the analysis down by ratings band "because this can sometimes mask relative opportunity".

The service is not all about research and portfolio construction expertise. Loomis Sayles takes a differentiated, 'partnership' approach that seeks to add service-related alpha in the EM space. For example, it helped a large EM debt client to redeploy assets to take advantage of the NAIC's 2024/2025 relief for life insurers that were impacted by negative interest maintenance reserve (IMR). The asset manager developed a highly customized template utilizing the client's portfolio holdings, so that they could run sensitivity analysis on their own– which was greatly appreciated by the senior leadership at the insurer - to optimize the portfolio, and was rewarded by this year's award judges.