Innovative Capital Solutions

The fixed income playbook is changing with the rate selloff. Portfolios built in a different rate environment may be carrying a rate bet they didn't know they had. Duration has stopped working. Apollo's Ben Trombley breaks down why rates are staying higher for longer — and what investors should do about it.

UK DB pension schemes are better funded than at any point in a generation. Rising gilt yields since 2022 have sharply reduced the present value of liabilities, and years of derisking and strong prior returns have left the aggregate funded position at its strongest in decades. For most schemes we believe the strategic question is no longer how to close a deficit, but how to protect that hard-won position through the endgame, whether that means an insurance buyout or long-term run-on. In both cases the task is the same: to convert the funded position into a portfolio that reliably pays pension cashflows as they fall due, at the lowest cost in capital and risk.

Corporate pensions are better funded and more fixed income–oriented than ever, and with LDI now widespread, fixed income composition has become increasingly consequential. Apollo Partner Brian Weinstein explores how tight spreads and crowded returns have pushed sponsors beyond public IG into diversifying credit anchored by private placements and real estate financing. Private IG extends this further, tapping higher-quality privately originated assets to improve diversification, income and surplus outcomes while preserving hedge efficacy.