Do you think the. The market needs the Fed to cut interest
rates. To rally even further, the current
interest level is a little bit high. So I think it has to be lower than it is
now, forced the stock market to see rising trend
in the face of the economic slowdown like this, maybe the fourth quarter or
maybe the next the first quarter of next year.
Is that the reason why you're more in favor of fixed income at this point?
So would you say fixed income over equity markets is your is your favorite
asset class right now? Yes.
Yes. I think equity market.
I think the possibility of the sharp drop of the prices of risky assets is
very limited. And the fixed income interest rate is a
little bit higher. And if
if the interest rate, Don, for significantly
the current interest level is is is very attractive.
Looking outside traditional assets like stock and bond markets, where would you.
What would what exposure would you increase?
I think the expansion
of the alternative market would be very helpful.
At the end of a 10 year tenure, one by the alternative investment ratio of
Casey is seventeen point five, but we increase the 5 percent.
For alternative investment. And if we look at the
returns of the traditional assets, it is seventeen point five, but maybe
twenty twenty three percent maybe of the total fund's assets.
Yeah. And what's the target at the end of the
last year? Twenty two point five.
Eight. OK, but now 23 percent.
Our target is to 25 percent by 2025.
I know part of your strategy within alternatives is private debt and private
credit. How much are you looking to invest in
private credit? Private credit is the more one of the
most promising sector. Under these circumstances, actually, our
portion is around 10 percent of our alternative investment.
Actually, we are trying to increase maybe 15 percent or above 15 percent.
What type of yields are available for people who are looking at private
credit? I know you're actively looking to
increase what is available. Are we are direct lending money?
Yeah, I think when we direct lending directly to blue chip companies with
high cash flow would be very
attractive. Are there any specific industries or
sectors that you're looking to be active in when it comes to private credits
or geographies or countries or territories?
What's what's the most interesting part to you right now?
Private credit? Absolutely
private. I mean, there is no specific reason for
private credit. Generally, alternative investment in the
advanced countries like the U.S. and Europe is the preferred country.
It's because there are a lot of dual sourcing opportunities.
And leading GOP is I guess a lot of people
now might be wondering you're going. Quite relatively big on alternatives.
So within alternatives themselves, you mentioned 10 to 15 percent of that would
be private debt. If you could talk about the other 80, 85
percent of alternatives, how do you want to organize that part of your asset
allocation? Maybe 50 percent, maybe private equity
and real estate and infrastructure, maybe 10 to 25 and hedge fund and
private debt to the 10 to 15 percent.
OK, yeah. So 25 percent of total assets for
alternatives. If you were twenty three percent.
Twenty three percent. The target is 25 by 20, 25 by
alternative fund. If you could increase that further,
would you. Or is that is that the current maximum
that you can go? For example, we have some limitations
from the minister of finance. They are our one of main sponsors.
They have some guidance. So I think in order to increase the rate
of alternative investment, we need to discussion with them about this.
I know this is more longer term. But would you see a need in the future
to have those discussions? I think as a investor asset investor, we
need to increase the proportion of alternative investment 30 percent, 40
percent, maybe CPE. PIB is over 50 percent,
but we are also the keeper of the foreign exchange rate.
So we have to maintain our liquidity. So I think
maybe 25 percent may be appropriate for the time being.