Variety Capital has opened an Irish domiciled UCITS investment platform with a fund managed by CKC Capital, an experienced US credit investment team.
The fund has launched with investments from UK and European institutional investors.
The fund aims to replicate the performance of CKC Capital LLC’s flagship fund, CKC Credit Opportunity Master Fund Ltd, launched in 2013 which follows the same strategy and has returned positive performance for 102 out of 103 months since inception.
Graham Loughridge, CEO of Variety Capital, says: “I am very pleased to have launched the Variety Capital ICAV with CKC Capital managing our first fund, the Variety CKC Credit Opportunity Fund. The purpose of our ICAV is to provide non-US institutional investors with access to leading US investment managers, and to do so with the transparency and liquidity that is prescribed by the UCITS regulations. This is demonstrated by offering investors access to CKC Capital, a truly elite US fund manager that runs one of the world’s best credit funds as measured by risk-adjusted returns.
“We launched our ICAV investment platform as we know that the vast majority of non-US institutional allocators only invest in UCITS funds and many good UCITS funds are either closed to investors, or soft-closed with limited capacity. With over USD15 trillion in assets, UCITS is the “gold standard” in asset management globally but due to the investment restrictions that protect investors, allocators face material challenges in sourcing alpha for their portfolios.
“We therefore decided to build an investment platform and partner with outstanding investment managers who demonstrate proven track records and liquid strategies that can be managed within the UCITS regulations. We conducted research on over 4,000 funds from which only six met the necessary criteria. That process has resulted in us launching our first UCITS sub-fund with CKC Capital.”
Managed by Co-Founders KC Baer and Chris Yanney, the CKC Credit Opportunity strategy has demonstrated best in class risk-adjusted credit returns. The track record of the flagship fund is particularly impressive as it has been produced with nominal beta and with low correlations to both fixed income and equity markets. Given inflationary pressures, the current short duration approach of the Variety CKC Credit Opportunity Fund aims to provide institutional investors with a very timely and compelling diversification in their fixed income holdings.
CKC provides some of the most discerning and circumspect US institutional investors with the potential to benefit from outstanding risk-adjusted returns and downside protection. I am delighted that non-US institutional investors now have access to this source of returns and alpha on the Variety Capital UCITS investment platform on a daily-dealing basis.
Baer and Yanney say: “Our primary goal every day is to serve our investors by delivering outstanding risk-adjusted returns. With just one down month in the flagship fund (CKC Credit Opportunity Master Fund, Ltd – Institutional Share Class) of -0.42 per cent in eight-plus years, an annualised return of 7.4 per cent achieved with a volatility of 1.9 per cent, we believe that our investment team is achieving that goal. We aim to generate significant alpha within a highly liquid strategy that combines active trading, expert security selection with vigilant risk and duration management.
“Institutional investors might find this an opportune strategy given recent inflation data and the risks and volatility in most fixed income portfolios.
“We are delighted that we are now in partnership with Variety Capital and managing assets for European institutional investors on the Variety Capital UCITS platform.”
