Commercial Mortgage Loans
Commercial Mortgage Loans, which are collateralized by income-producing commercial real estate, have been a staple of institutional investor portfolios since the late 19th century. Over the past two decades, Commercial Mortgage Loans have proven to be a low‐risk, profitable fixed income alternative for a number of reasons:
- Asset/liability duration matching which mitigates interest rate risk
- Enhanced risk adjusted returns versus fixed income alternatives, including corporate bonds
- Superior call protection relative to corporate bonds
- Materially lower historical incidence, delinquency, and severity rates than both corporate bonds and CMBS
- Significantly lower volatility as measured by the standard deviation of quarterly total returns over the past ten years
- Favorable Risk Based Capital Treatment
AAM offers our insurance clients the ability to invest in Core Commercial Mortgages which seek to provide an attractive spread, principal protection, diversification, and call protection. In addition, AAM is able to tailor separate account mandates.
AAM has partnered with Quadrant Real Estate Advisors (www.quadrantrea.com), based in Atlanta, with offices in London and Sydney, Australia. Quadrant manages $6.1 billion of commercial and multifamily real estate assets. Quadrant’s investment style is fundamentals driven with a focus on capital preservation, current income and relative value. The Quadrant management team has worked together for nearly two decades, and the combined real estate investment experience of the senior partner team exceeds 250 years and spans over several market cycles across all property types.