Avoca Capital has launched a long-only convertible bond fund, Avoca Convertible Select Global, a UCITS compliant Luxembourg SICAV offering daily liquidity.
This follows Avoca’s move in November 2011 to further extend its product offering and partner with an experienced team of specialists in convertible bonds. This asset class is in increasing demand with investors attracted to the combination of debt protection with equity upside participation.
The new fund formally opens Avoca’s convertible bond offering, which was launched in April 2012 to manage partner capital, to a wider investor audience. The team has returned 16 per cent after fees and outperformed its benchmark since April 2012 for Avoca’s partners who will also maintain their full investment in the new UCITS offering.
The Avoca convertible bond team is headed by Tarek Saber. Saber, Jasper van Ingen and Thomas Thoden van Velzen are former members of the APG convertible bond team. APG is based in the Netherlands and is one of Europe’s largest pension funds. Whilst at APG the team previously managed a portfolio of long-only convertible assets of approximately EUR6bn.
The Avoca convertible bond team has a global mandate across all sectors and aims to outperform the UBS Global Focus convertible bond index through its conviction and research driven investment approach. Extensive credit research is performed on each holding and the team benefits from being fully integrated into the wider Avoca platform.
Alan Burke, co-chief executive, of Avoca Capital, says: “Avoca has always seen the attractions of the convertible bond asset class, particularly so in today’s environment, offering bond-like downside protection but crucially upside to increasing equity valuations also. We are excited to give a wider range of investors access to our team’s expertise through a UCITS compliant structure that will offer daily liquidity.”
Saber says: “Convertible bonds have outperformed both corporate bonds and equities on a cumulative return basis since 1994. Our convertible expertise combined with Avoca’s credit research infrastructure enables us to offer investors a highly attractive integrated conviction-driven convertible bond investment process.”