Schroders has launched Schroder GAIA BSP Credit, an externally-managed fund on its GAIA platform managed by Benefit Street Partners (BSP), the debt investment arm of Providence Equity Partners.
The fund is a fundamental credit long short strategy that applies a bottom-up approach, combining deep credit analysis, sophisticated structuring and active trading to maximise expected returns while limiting downside risk.
Investing primarily in global high yield corporate credit with a focus in the US, the fund will aim to generate attractive risk-adjusted returns in both up and down markets and provide investors with an absolute return of 5-7 per cent per annum.
With reduced exposure to directional market trends and a lack of correlation to various indices, the fund will be positioned to maximise downside protection and outperform during market selloffs.
Thomas Gahan, a seasoned investment professional with over 30 years of credit experience, leads the team as CEO of BSP and CIO of the long short strategy along with co-portfolio managers David Ren and Josh Passman. The credit long short team will follow the same research process employed in the existing strategy to identify and exploit mispriced credits on both the long and short side.
Since the long short credit strategy’s inception in February 2011, the strategy has generated an annualised return of 5.9 per cent net of fees with a volatility of approximately half the long-only index.
The greater BSP credit platform currently manages over USD10 billion on behalf of clients with over 50 investment professionals based in New York.
Thomas Gahan, CEO and CIO of BSP and the fund manager, says: “We’re delighted to partner with the Schroder GAIA team as one of the leading UCITS distribution platforms. Over the past couple of years, credit market yields have approached historic lows, and the relentless reach for yield has allowed investors to ignore differences in credit quality. Our alpha-capture strategy is designed to exploit these mispricing inefficiencies, equipping us to thrive and outperform when market volatility increases and spreads widen.”
