Guardian Turns to BlackRock Veteran in Yield Hunt Beyond Canada

Guardian Capital Group is bracing for low rates in Canada for longer, as it looks to expand into higher-yielding assets with the addition of a former BlackRock Inc. money manager.

Aubrey Basdeo, who left the world’s largest asset manager early last year after a 14-year tenure, is the new head of Canadian fixed income at Guardian, he said in an interview. He leads a team of eight at the company’s investment management unit, Guardian Capital LP, and reports to Chief Investment Officer Denis Larose.

Basdeo, who started at Guardian last month, is looking into investments in emerging-market debt as Canadian corporate bond yields hover near record lows. An index of U.S. dollar emerging-market debt yields 3.82%, more than double that of a basket of loonie-denominated corporate securities, according to Bloomberg Barclays indexes.

“We need to build a fixed income platform that allows us to have these components on it,” Basdeo said. “We’re going to be very methodical about our approach in how we get there.”

Guardian is eyeing emerging-market debt as downgrades accelerate amid a “rapidly deteriorating” outlook, Bloomberg Intelligence strategist Damian Sassower wrote in a Nov. 4 note. The potential for fallen angels -- credits that drop to junk from investment grade -- is on the rise, especially in countries like Romania, Colombia and Croatia, Sassower said.

The Toronto-based firm had C$32.7 billion ($25 billion) of assets under management as of Sept. 30. Guardian completed the acquisition of a majority stake in Agincourt Capital Management last month, whose $7.2 billion of assets focuses on U.S. investment-grade fixed income. Basdeo is also looking to expand Guardian’s footprint in high yield, where it already has a portfolio manager, as well as private debt.

“Canadians need to cast a wider net in order to capture some of those higher income streams,” said Basdeo, who was part of a team at BlackRock that advised Bank of Canada on the implementation of some debt purchase programs set up to restore liquidity in the financial markets. “By forsaking looking beyond Canada, you’re giving up the potential, you’re missing out on high returns from elsewhere.”

©2020 Bloomberg L.P.

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