Navigating Volatility in Leveraged Finance: Q2 2025 Insights

Mizuho's Leveraged Finance team discusses market volatility following April 2nd tariff announcements. They prioritize high yield and loan fund flows, issuance, and pricing, and examine hung transactions. The team discusses recent deals and gives their outlook on navigating Leveraged Finance markets in Q2 and beyond.

In the wake of April 2nd tariff announcements, Mizuho's Leveraged Finance team is closely monitoring market volatility. The team, focusing on high yield and loan fund flows, issuance, and pricing, is examining hung transactions to navigate the Leveraged Finance markets in Q2 and beyond.

The team discussed recent deals and their outlook on the market. Despite the uncertainty, Mizuho's Leveraged Finance team remains optimistic about the potential for growth in high-yield debt and loan funds. They believe that the recent deals, while challenging, demonstrate the team's ability to adapt to market conditions and capitalize on opportunities.

Chief Executive Jason Windsor, appointed last September, reaffirmed Aberdeen Group’s strategy to become the UK’s leading wealth business and reposition its investment arm. He expressed confidence in meeting full-year financial targets, including adjusted operating profit exceeding £300m, despite market uncertainty [1].

Aberdeen Group, which reverted to its original name from “abrdn” in March, continues its cost-cutting program initiated in January 2024. The program targets 500 job reductions and £150m in annual savings to improve the investment division’s profitability. This strategic move is aimed at enhancing the firm’s financial resilience in the face of market volatility [1].

The team at Mizuho is also prioritizing the improvement of service levels to slow adviser platform outflows. This strategy is similar to the approach taken by Aberdeen Group, which has seen adviser platform outflows slow to £600 million, the lowest level in over a year [1].

The retail platform, interactive investor (ii), showed positive momentum, with customer numbers increasing 9% year-on-year to 450,000 and a notable 29% rise in higher-value SIPP accounts. This growth is a testament to the firm's ability to attract and retain clients even in volatile market conditions [1].

As the market continues to evolve, Mizuho's Leveraged Finance team is poised to play a significant role in shaping the future of the high-yield debt and loan funds market. Their strategic focus on high yield, loan fund flows, issuance, and pricing, coupled with their experience in navigating hung transactions, positions them well to capitalize on opportunities in Q2 and beyond.

References:
[1] https://www.scottishfinancialnews.com/articles/aberdeen-hit-by-ps52bn-q1-outflows-amid-market-volatility