“On corporate bonds, the yields are falling,” Edward Shields, an analyst at Sandler O’Neill & Partners LP, said by phone. “In this current low-interest-rate environment, there’s not a lot they can do with traditional investments.”
Fed’s Moves
Cooper said Lincoln isn’t adjusting the duration of its bonds to boost yields or prepare for an eventual end to Fed stimulus efforts.
“My job is not to make a bet on what’s going to happen with the Fed,” she said.
Dennis Glass, the insurer’s CEO, said in February that Lincoln added $600 million to assets including hedge funds, private equity, private placements and middle-market loans, and estimated the investments would yield 2 percentage points more than investment-grade corporate bonds. The insurer plans to commit $400 million more to alternatives, Glass said.
“We’re not jumping into this,” he said on a Feb. 7 conference call with analysts. “We’re going to put it out over time and be cautious.”
Cooper’s Career
Before joining Lincoln, Cooper was among executives at Goldman Sachs who took over duties after Eric Kirsch left to oversee the portfolio of Aflac Inc., the largest seller of supplemental health coverage. Kirsch has favored U.S. corporate bonds over Japanese government debt to boost yields at Aflac, which is based in Columbus, Georgia, and does most of its business in Japan.
Cooper, who studied actuarial science at Temple University, was chief risk officer at Aegon NV’s Americas business prior to joining Goldman Sachs in 2008. New York-based Goldman Sachs manages $131 billion in insurance assets, according to its website.
Both Lincoln and Aflac hired Goldman Sachs to advise on portfolios after adding investment chiefs. Glass said in September that after working to avoid risk at Lincoln since 2008, he began examining ways to add riskier assets to boost returns.