UK-based firm Hermes Fund Managers has increased its global fixed income portfolio by launching Hermes Multi Strategy Credit Fund.
The fund will be managed by Hermes Credit co-head and senior credit portfolio manager, Fraser Lundie, and senior credit portfolio manager and it was launched in May 2014 with assets of $242.08 million.
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Hermes Credit co-head Fraser Lundie said five years into the high-yield bull market, investors continue to seek strong returns but are wary of valuation and liquidity risks.
"By combining high-conviction, long-only investments with a range of defensive market-neutral trades, the Hermes Multi Strategy Credit Fund aims to consistently deliver positive risk-adjusted returns," added Lundie.
With a return target of 7% annualized, the fund is designed to deliver high-yield-like returns, with significantly lower volatility, and capital preservation characteristics.
Hermes Credit co-head Mitch Reznick said: "By focusing on security selection, rather than issuer selection alone, we aim to exploit differences in relative value among the bonds, loans and derivatives in companies’ capital structures. We rely on our intensive, bottom-up research to uncover long-only and market-neutral investment opportunities within the context of our appetite for risk and intra credit relative value as governed by our top-down view."
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