Azimut Holding has launched what is believed to be the first UCITS IV-compliant hybrid bonds funds in Europe. The fund – AZ Fund Hybrid Bonds - will invest 100 per cent of its assets in hybrid bonds and has an investment time horizon of four and a half years, reported investmenteurope.net.
The fund will offer diversification to investors in terms of issuer, sector, and geographic reach to produce a portfolio with an optimal risk/return profile. Stefano Mach, manager of the new fund, was quoted as saying: “Hybrid bonds are a funding source which is in between equities and traditional bonds in terms of investing costs,” adding that several issuers prefer to get funding through these financial instruments not only because it improves credit structure but also because “it does not dilute the value for shareholders and it accounts for only 50 per cent as debt”.
In other fund launch news, European credit manager Avoca Capital Holdings has launched a new convertible bond fund. The Avoca Convertible Select Global fund is a Luxembourg-domiciled SICAV. The bond team is headed up by Tarker Saber and includes Jasper van Ingen and Thomas Thoden van Velzen. All three have previously worked for the convertible bond team at Dutch-based pension fund APG. The fund itself will employ a long-only mandate and invest across all market sectors and will look to outperform the UBS Global Focus convertible bond index.
Avoca Capital co-chief executive, Alan Burke, was quoted as saying: “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.” Saber said that the team’s convertible expertise combined with Avoca’s credit research infrastructure allowed them to offer investors a highly attractive conviction-driven convertible bond investment process.
Malta-based financial services firm Calamatta Cuschieri, which offers investment advice, online trading, investment management and fund administration services, has converted its Calamatta Cuschieri Funds SICAV into a UCITS structure. The Sicav and its three sub-funds have been licensed by the MFSA to operate as a UCITS scheme and to be marketed across the EU.
Michael Galea, Head of Investment Management said that “In recent years, the UCITS brand has become the gold standard EU investment fund product for retail investors and we are proud to form part of the group of investment fund houses worldwide that are able to offer this directly to their clients. This is a huge step forward for the company and its investors.”
All three sub-funds in the Sicav, which launched in 2011, follow a distinct investment strategy and are managed Calamatta Cuschieri Investment Management Ltd, a UCITS management company owned by Calamatta Cuschieri. In particular, the CC High Income Bond EUR and the CC High Income Bond USD enjoyed annual returns of 12.10 per cent and 9.93 per cent respectively at the end of July.
“We are very satisfied with the way the funds’ have performed especially since the environment within which we have had to manage the funds was a challenging one. We are confident that the upgrade to UCITS will open up new market opportunities on an international level,” added Galea.
Finally, Morgan Stanley this week announced the launch of a new UCITS fund to offer investors exposure to Metropolitan West Asset Management LLC. Onboarded to the bank’s FundLogic Alternatives Plc platform in collaboration with Longchamp Asset Management, the MS TCW Unconstrained Plus Bond Fund seeks to provide investors access to TCW Group Inc’s excellence in the fixed income space. TCW is a global asset management firm that offers investors access to a variety of highly ranked fixed income funds under the Metropolitan West Asset Management LLC and TCW fund families.
Stephane Berthet, Head of the FundLogic Alternatives platform said that TCW was a manager “with whom we feel privileged to work with”.
“Expanding TCW’s investment platform internationally has been a significant priority for the Firm”,said Heinrich Riehl who heads TCW in Europe. “Launching this Fund with a respected investmentfirm like Morgan Stanley is consistent with our long-term commitment to serve investors acrossEurope.”
Longchamp Asset Management has been appointed the sole distributor of the fund. The firm’s president and founder, David Armstrong, added: “The MS TCW Unconstrained Plus UCITS Fund has been designed to operate with a wide investment latitude, allowing it to manage interest rate risk and deliver returns in all market environments while focusing on asset classes believed to offer the most attractive characteristics. The Fund may invest its assets in Government bonds, Investment Grade US bonds, High Yield bonds, Emerging Markets bonds, Foreign Currencies, Asset-Backed and Mortgage-Backed securities, as well as Common and Preferred securities. The strategy’s distinctive feature is its capacity to express a wide scope of duration scenarios from -3 to +8 years.”