A. General Description of Advisory Firm
Hartford Investment Management Company (“HIMCO”) is registered with the Securities and Exchange
Commission as an investment adviser and is a wholly owned subsidiary of The Hartford Financial
Services Group, Inc. (“The Hartford”), a publicly traded company. HIMCO was organized in 1996 by
acquiring the business, personnel and corporate name of an affiliate that had been in operation since
1981 and that performed substantially similar services. Because HIMCO succeeded to the same
business and utilized the same personnel as the affiliate prior to the acquisition, the affiliate's historical
information is included with HIMCO's.
HIMCO provides investment advisory services primarily to institutional clients and private funds.
HIMCO’s institutional clients are mainly comprised of affiliated and unaffiliated insurance companies,
corporations, and employee benefit and pension plans. The private funds managed by HIMCO are
portfolios owned by unaffiliated insurance company separate accounts that meet the definition of
private fund.
As of December 31, 2023, HIMCO managed approximately $108.5 billion in fixed income, equity and
alternative assets. (Please see
Section E of this Item 4 below for further disclosure regarding assets
under management.)
B. Description of Advisory Services
HIMCO provides discretionary and non-discretionary investment advisory services to institutional
clients, including its affiliates. HIMCO’s institutional clients are mainly comprised of affiliated and
unaffiliated insurance companies, corporations, and employee benefit and pension plans. In addition,
HIMCO provides:
• Sub-advisory services with respect to a registered investment company, which is sponsored
and distributed by entities unaffiliated with HIMCO;
• Sub-advisory services to unaffiliated SEC registered investment adviser(s);
• Advisory services to the private funds described above, which are exempt from registration
under the Investment Company Act of 1940 (“1940 Act”) and are sponsored and distributed by
entities unaffiliated with HIMCO; and
• Portfolio consulting services for a number of unit investment trusts registered under the 1940
Act that are sponsored and distributed by entities unaffiliated with HIMCO. As of the date of
this brochure HIMCO no longer provides portfolio consulting services for new unit investment
trusts but continues to provide support for certain existing trusts launched prior to February 29,
2024, until such trusts mature or terminate.
HIMCO’s principal strategies include the following:
Fixed Income
HIMCO manages fixed income assets by using a disciplined process which is designed to create value
from three sources: (i) a macro-economic strategy that considers duration and yield curve, (ii) strategic
asset allocation, and (iii) security selection. Please see
Item 8 for a description of the fixed income
investment process.
• Core Fixed Income - The objective of the Core Fixed Income strategy is to actively manage a high
quality diversified fixed income portfolio in which accounts are normally comprised of at least 90%
U.S. dollar denominated investment grade securities (such as obligations of the U.S. Government,
its agencies and instrumentalities, corporate debt, asset-backed securities and mortgage-backed
and other mortgage-related securities) and with duration similar to broad market benchmark indices
such as the Bloomberg U.S. Government/Credit Index or the Bloomberg U.S. Aggregate Index.
5 HARTFORD INVESTMENT MANAGEMENT COMPANY
The strategy can use derivatives, such as options, futures and swaps, which can be illiquid, can
disproportionately increase losses, and have a potentially large impact on performance.
• High Quality High Yield - The objective of the High Quality High Yield strategy is to actively manage
a high quality high yield (BB) portfolio in which accounts are normally invested at least 90% in BB
tier high yield and emerging market fixed income securities. Investments in high-yielding, lower-
rated securities involve risks beyond those inherent in higher-rated investments. Investments in
foreign securities, including emerging markets, involve risks beyond those inherent in solely
domestic investments. Foreign securities are subject to certain risk of overseas investing, including
currency fluctuations and changes in political and economic conditions. These risks are magnified
in emerging markets. The strategy can use derivatives, such as options, futures and swaps, which
can be illiquid, can disproportionately increase losses, and have a potentially large impact on
performance. The benchmark is the Bloomberg Ba U.S. Corporate High Yield Index 2% Issuer
Cap-Sector Neutral.
• Long Duration Corporate Fixed Income - The objective of the Long Duration Corporate Fixed
Income strategy is to actively manage a high quality diversified fixed income portfolio in which
accounts are predominately comprised of investment grade corporate securities and have a
duration similar to long duration benchmark indices, such as the Bloomberg Long U.S. Corporate
Index. The strategy can use derivatives, such as options, futures and swaps, which can be illiquid,
can disproportionately increase losses, and have a potentially large impact on performance.
• Passive U.S. Aggregate Bond Index - The objective of the Passive U.S. Aggregate Bond Index
strategy is to manage a fixed income portfolio in which accounts are managed to replicate the
performance of the Bloomberg U.S. Aggregate Index. The strategy will only invest in bonds which
are in the Bloomberg U.S. Aggregate Index or bonds with the same issuer or obligor as those in
the Index. The strategy can use derivatives, such as options, futures and swaps, which can be
illiquid, can disproportionately increase losses, and have a potentially large impact on performance.
• Short Duration - The objective of the Short Duration strategy is to seek attractive investments
considering both yield and total return in which accounts are normally comprised of at least 65%
investment grade securities and have the ability to invest up to 35% in non-investment grade
securities (as well as bank loans or loan participation interests). The strategy, under normal
circumstances, will maintain an average credit quality of at least Baa3 by Moody’s and a dollar
weighted average duration and average maturity of less than 3 years. Permitted investments
include but are not limited to U.S. dollar denominated corporate issues, commercial mortgage-
backed securities, asset-backed securities, mortgage-related securities, securities issued or
guaranteed by the U.S. Government, and up to 25% of its total assets in securities of foreign
issuers. The strategy can use derivatives, such as options, futures and swaps, which can be illiquid,
can disproportionately increase losses, and have a potentially large impact on performance. The
benchmark is the Bloomberg 1-3 Year U.S.
Government/Credit Index.
Equity
HIMCO manages equity assets using passive equity strategies. Please see
Item 8 for a description of
the equity investment process.
• Indexed Large Cap Equity - The objective of the Indexed Large Cap strategy is to replicate the total
return of the S&P 500 Index by investing at least 95% in listed U.S. equity securities. The strategy
benchmark is the S&P 500 Index.
Alternative Assets
HIMCO also manages alternative asset strategies. Please see
Item 8 for a description of the investment
processes associated with these strategies.
• Commercial Mortgage Loans - The objective of the Commercial Mortgage Loan strategy is to
capture the spread premium over single A-rated public corporate industrials to compensate the
6 HARTFORD INVESTMENT MANAGEMENT COMPANY
investor for liquidity risk while providing enhanced structural protections through negotiated
covenants, security or priority of payment. HIMCO seeks to achieve this objective by originating
commercial mortgage loans on a non-recourse, permanent-financing, construction, fixed and/or
floating-rate basis. The strategy targets investments in property types, such as
industrial/warehouse, multifamily, retail, and office, with a loan-to-value (“LTV”) ratio that generally
falls within the range of 50%-70% with typical deal sizes ranging from $20 to $50 million. The
strategy seeks to provide a well-constructed portfolio that delivers to our clients enhanced credit
diversification due to access to issuers not available in the public markets and whose performance
dynamics differ substantially from corporate credit risk. The process employed relative to this
strategy enforces disciplined underwriting standards, utilizing specific criteria for each investment
to build a diversified portfolio of loans in terms of borrowers, geography, and asset class.
• Private Equity (Funds and Equity Co-Investments) - The Private Equity Group participates in the
private equity market through a variety of strategies. The three primary strategies consist of: 1)
investing in domestic lower middle market private equity buyout funds; 2) investing in private equity
funds that offer diversification and high return expectations, outside of the lower middle market;
and 3) investing in direct equity co-investments, alongside of a fund, in their portfolio companies.
The core strategy is to invest in lower middle market or middle market U.S-focused buyout firms.
The U.S. middle market segment offers potential value relative to other private equity strategies
due to its potentially greater transaction inefficiencies, lower purchase multiples, lower leverage,
and greater number of companies and transactions. However, the strategy does opportunistically
invest in fund strategies outside the middle market buyout space. These non-core investments are
targeted for their potential return, diversification or risk mitigating characteristics. The equity co-
invest program leverages general partner relationships developed through fund investing and these
general partners largely represent the origination platform of the direct equity co-invest program.
Across all areas (funds and equity co-investments), the objective of the private equity strategy is to
seek strong absolute and risk-adjusted return opportunities that balance the potential for gains with
the probability of capital loss.
• Private Placements - The objective of the Private Placement Fixed Income strategy is to seek
relative value debt investment opportunities with the objective of capturing a premium relative to
comparable public bonds. This is carried out by investing mainly across the investment grade
private credit market, while structuring the portfolio to effectively manage risk. The strategy focuses
on both current income generation and capital appreciation with a priority on income generation.
The strategy is multi-dimensional, considering credit risk, long-term nominal and relative spreads,
as well as select return opportunities. The Private Placement strategy starts with the premise that
private placements are less liquid than publicly traded bonds. Based on this premise, we take a
long-term view in our security selection, portfolio construction and value metrics. The process
employed in this strategy is built upon fundamental credit and relative value analysis and follows a
disciplined and consistent approach in an effort to fully understand and adequately price the risks
inherent in each transaction.
Conflicts Inherent in Agreement to Provide Advisory Services
In addition to the specific conflicts of interest noted elsewhere in this document, there are conflicts of
interest inherent to entering into HIMCO’s standard investment management agreement (“IMA”). For
example, HIMCO includes an indemnification and exculpation provision (a “hedge clause”) in its IMA.
The hedge clause exculpates HIMCO from liability and imposes indemnification obligations on the client
with respect to losses, liabilities and other damages incurred unless HIMCO has failed to abide by the
standard of care set out in its IMA. HIMCO’s standard IMA also includes a non-waiver provision which
states that certain laws, including federal securities laws, impose liabilities (under certain
circumstances) on persons who act in good faith, and therefore the hedge clause does not waive any
rights a client has under such laws. For example, a client cannot waive HIMCO’s fiduciary duty as a
registered investment adviser under federal law via contract. Such a hedge clause creates a conflict of
interest between HIMCO and its client as it contractually limits HIMCO’s liability to its client and subjects
the client to the risk of having to indemnify HIMCO under certain circumstances. This conflict of interest
7 HARTFORD INVESTMENT MANAGEMENT COMPANY
is characteristic of the conflict of interest that exists with respect to all aspects of any agreement to
provide services because the provider of the service (here, HIMCO) and the recipient of the service
(here, the client) are on “opposite sides” of the contract resulting in their interests being adverse with
respect to each term of the contract.
C. Availability of Customized Services for Individual Clients
As a general rule, HIMCO will tailor its advisory services for separately managed client accounts based
on a client’s particular needs, including the client’s overall financial condition, goals, risk tolerance and
other factors unique to a client’s particular circumstances. In addition, HIMCO typically will tailor
investment guidelines for separately managed client accounts in order to restrict investments in certain
securities or asset classes as requested by the client.
D. Wrap Fee Programs
HIMCO does not participate in a wrap fee program.
E. Assets Under Management
As of December 31, 2023, HIMCO had approximately $108.5 billion of assets under management:
U.S. Dollar Amount
Discretionary $105,377,455,575
Non-Discretionary $3,153,337,138
Total $108,530,792,713
8 HARTFORD INVESTMENT MANAGEMENT COMPANY