Phoenix Investment Adviser, a USD657m investment firm focused on high-yield US corporate debt, has initiated a soft close of its flagship JLP Credit Opportunity Fund.
It will accept new investors until 1 July. After that, the fund plans to protect existing investors by not allowing capital from new investors to dilute the fund’s future returns. For the time being, existing investors may still add capital to the fund.
"We feel this is a positive action taken for the benefit of our current investors. Ten years ago, we promised our initial investors that we'd close the fund when it reached capacity," says Phoenix founder and chief investment officer Jeff Peskind (pictured). "We are money managers, not asset gathers, and we are focused on continuing to deliver robust returns to our investors, as opposed to just growing AUM."
The strategy, which has USD550m, has grown to an optimal size consistent with the funds high return goals in Phoenix's niche market of stressed corporate bonds. At this time, the opportunity set of investments has continued to shrink as the credit markets remain in a period of low defaults and low stress.
"It is important to maintain a level of nimbleness when investing in this market and we have decided to take preemptive action to ensure are returns do not suffer based on our size," said Peskind.
Phoenix also continues to be focused on growing its two-year-old JLP Institutional Credit Fund (USD98m), a long/short US corporate credit fund which is targeted at pensions and endowments seeking a steady seven to nine per cent return without experiencing the volatility typically associated with high-yield investing.