Muzinich & Co

Muzinich & Co Asset Allocation Group Update – March 2025   There was much to discuss at the latest meeting of our Asset Allocation Group, developments that could have lasting effects on economies and financial markets.   Here are the top takeaways:   ◼️ US tariffs are coming in higher, more extensive and quicker than anticipated. The impact could be weaker US GDP growth and higher inflation. Equity markets have sold off over growing concerns on what Trump 2.0 could do to the economy – a sharp reversal of the optimistic mood that greeted his election victory. ◼️ With the US threatening to withdraw from NATO, Europe unveiled an ambitious defense spending plan. Meanwhile, Germany’s new fiscal regime could be a game changer, with €500 billion earmarked for infrastructure investment and higher structural deficits on the table. The impact could be stronger European growth – a positive for credit fundamentals - but with higher government bond yields. ◼️ Credit markets are starting to diverge, with European IG spreads falling below their US counterparts for the first time since Russia’s invasion of Ukraine in 2022. For more details, watch the AAG video with our director of market and product strategy, Erick Muller, or read the report in full - https://lnkd.in/eyM52erB.   To receive the latest thinking from our investment teams on public and private corporate credit markets straight to your inbox, click here -   #AssetAllocation #GlobalMarkets #CreditMarkets #FiscalPolicy #Tariffs #TradeWars

The oil market is full of surprises—will 2025 bring unexpected shifts? Oil is one of the most critical drivers of emerging market (EM) portfolios, influencing bond yields, investor sentiment and sector allocations. As we head into 2025, the outlook for Brent crude, shaped by macroeconomic trends, geopolitical risks, and supply-demand dynamics, presents a mix of challenges and opportunities. What does this mean for EM investors? With “higher for longer” as one of our key themes for commodities, we believe a US$74 median price remains constructive for energy sector corporates. However, we are selectively managing exposure—favouring downstream players and quasi-government entities while reducing positions in companies vulnerable to oil price volatility. Capital at risk. To read the full paper, click here: https://lnkd.in/ecbiqp6m #EmergingMarkets #OilPrices #Commodities #Investing #EnergyMarkets For more information on Muzinich & Co., visit www.muzinich.com To receive the latest thinking from our investment teams on public and private corporate credit markets straight to your inbox, click here - https://lnkd.in/epZwbVYx

Muzinich & Co Corporate Credit Snapshot – March 2025 ◼️ Global credit delivered positive returns across the board in February. ◼️ On the back of the US 10-year Treasury yield moving more than 30 basis points (bps) lower for the month, US investment grade credit was the best performing sub-asset class. ◼️ We saw meaningful rate divergence between the US and Europe in February, and the spread premium that we have seen in Europe over the last few years reversed, with the market now demanding a spread premium for US credit risk. In our view, this shift in momentum was driven by ongoing uncertainty around President Trump’s various policies and their impact on the US economy, and notable weakening of US economic data. ◼️ Emerging Market (EM) debt generated positive returns. Please click to read our monthly Corporate Credit Snapshot which looks back at market events over the previous month - https://lnkd.in/eidzFdq5 #corporatecredit #fixedincome #publicmarkets Past performance is not a reliable indicator of current or future performance

If the US government was a company……. What do China, Germany and the US have in common? Their governments operate like businesses — just with very different management styles. In the latest edition of the Muzinich & Co Weekly Market Comment, we explore how each administration's approach is shaping their economies and financial markets. ◾ China: A centralized, long-term strategist, trying to pivot to boost domestic demand. ◾ Germany: A "friendly takeover" ushers in major spending plans, including a €500 billion infrastructure fund. ◾ US: A private equity mindset with efficiency, tariffs, and deregulation at the core. But how are investors reacting to these different styles? Click here for the deep dive: https://lnkd.in/efrMf45N For more information on Muzinich & Co., visit www.muzinich.com To receive the latest thinking from our investment teams on public and private corporate credit markets straight to your inbox, click here - https://lnkd.in/epZwbVYx #Markets #Economy #Investing #CorporateCredit #FixedIncome #BondYields

Muzinich & Co Private Debt recently committed senior debt facilities to support Abac Capital’s acquisition and expansion of Grupo de Incendios. Grupo de Incendios is a leading manufacturer and distributor of active fire suppression systems in Spain and Portugal. Founded in Soria in the 1980s, it serves nearly 2,000 clients, including installers, wholesalers, and maintenance firms. With over 15,000 sqm of production and warehouse space, the company specializes in designing, manufacturing, and distributing water- and gas-based automatic suppression systems. Please click to learn more – https://lnkd.in/eHRk2Nih This should not be construed as an offer to buy, sell, or transact in any investments. Views are for information purposes only, are subject to change, and should not be construed as investment advice. Past performance is no guarantee of current or future results. Historic market trends are not reliable indicators of actual future market.

Shift in global bond markets: US vs. Europe After Donald Trump scored a resounding victory in the Presidential election last November, few would have expected European credit to outperform its US counterpart, or for US Treasuries to rally harder than European government bonds. But that is exactly the situation we find ourselves in. The question is why? Is political uncertainty in the US contributing to the market's concerns? Or are other factors at play? Muzinich & Co. portfolio manager Ian Horn, CFA looks for answers in the latest instalment of our Close Up series, available here: https://lnkd.in/euShhSze To receive the latest thinking from our investment teams on public and private corporate credit markets, click here - https://lnkd.in/epZwbVYx #BondMarkets #FixedIncome #USvsEurope #CreditSpreads #GlobalEconomy

Muzinich & Co portfolio manager Kevin Ziets joined AAM - Insurance Investment Management's Patryk Carwinski, CFA in the most recent episode of The Portfolio Fix, where they discuss our outlook for high yield corporate debt. The conversation covers important market trends and the potential impact of evolving policies. They compare high yield bonds and bank loans, along with exploring key metrics that could shape returns in the US high yield market. Please click here to watch the interview - https://lnkd.in/etNjimv6

We are delighted to announce that Muzinich & Co Private Debt has recently invested into Implico Group. Founded in 1984 and headquartered in Hamburg, Germany, Implico is a provider of SAP-embedded software and consulting services for the energy and natural resources industries.   Implico is an SAP Solution Extension Partner—the highest partnership tier, held by only ~20–30 firms globally. Implico’s software modules are integrated in SAP’s software suite, carry SAP branding, and are actively marketed by SAP’s global salesforce.   Please click to learn more – https://lnkd.in/eHRk2Nih This should not be construed as an offer to buy, sell, or transact in any investments. Views are for information purposes only, are subject to change, and should not be construed as investment advice. Past performance is no guarantee of current or future results. Historic market trends are not reliable indicators of actual future market.

Common denominator February ended on a soft note, but it was still a solid month for risk assets: ◾ US Treasuries stole the show in the government bond market. ◾ Corporate credit remained strong, with EM high yield leading the pack. ◾ European equities were bolstered by resilient economic data, hopes of a Russia-Ukraine ceasefire, and the election outcome in Germany. ◾ Beijing continued its efforts to restore confidence and revive the economy, injecting capital into major banks, with the promise of more support at the National People’s Congress this month. ◾ Meanwhile, North American equities struggled as earnings failed to impress and economic momentum slowed. The wildcard, which influenced sentiment across markets, was tariffs. Get the full breakdown in this week’s Muzinich Market Comment: https://lnkd.in/em8w6YhR #FixedIncome #Markets #Economy #CreditMarkets #Tariffs For more information on Muzinich & Co., visit www.muzinich.com To receive the latest thinking from our investment teams on public and private corporate credit markets straight to your inbox, click here - https://lnkd.in/epZwbVYx

In 2022 and 2023, with central banks in hiking mode and rates shifting systemically higher, there was a good reason for investors to be underweight duration. However, given where rates are today and with rate cuts starting to materialise, is it time to challenge that argument and take a more constructive view on duration? In the latest edition of the Muzinich & Co podcast, portfolio managers Ian Horn, CFA, Anthony DeMeo and Corentin Tarlier, cfa address that question and highlight the key features of Muzinich Global Market Duration Investment Grade strategy as it celebrates its first anniversary. 🔗 https://lnkd.in/e-JxedTY Muzinich views and opinions should not be construed as an offer to buy, sell or engage in any investment activity, they are for information purposes only.