American Beacon Advisors (American Beacon), a provider of investment advisory services to institutional and retail markets, has launched the American Beacon SSI Alternative Income Fund.
Since its inception in 2012, the fund has primarily used a convertible arbitrage strategy to provide investors with a market-neutral, fixed-income alternative. The fund generates return through four unique sources: income from convertible bonds and convertible preferred stocks; the interest rebate on underlying equity short positions; opportunistically adjusting its equity hedges; and identifying undervalued securities. The fund seeks to have low volatility and almost no beta to equity markets. It also maintains low duration and may serve as a defensive complement to a fixed-income allocation, particularly during rising interest-rate environments. The fund’s portfolio managers aim to generate alpha by identifying mis-pricing and arbitrage opportunities in the convertible markets while using hedges to help mitigate risk. The fund offers investors exposure to a niche asset class and a strategy typically only accessible to large institutional investors.
American Beacon will serve as the manager of the fund, while SSI Investment Management (SSI) will serve as the sub-advisor. Founded in 1973, SSI is an institutional asset manager specialising in risk-mitigation strategies and managing USD1.9 billion for institutional and high-net-worth investors. In January 2019, American Beacon’s parent company, Resolute Investment Managers, announced an agreement to acquire a majority interest in SSI.
“We’re pleased to be able to offer this Fund to our clients as a natural extension of our partnership with SSI,” says Gene Needles, chairman and CEO of American Beacon and Resolute Investment Managers. “We deeply respect SSI’s decades-long record of delivering competitive and risk-adjusted returns, and we believe our clients can benefit greatly from the team’s expertise.”
“We are thrilled to have American Beacon’s outstanding reputation and support bolstering this Fund, especially at a time when many investors are concerned about rising interest rates and seeking alternatives to traditional fixed-income and equity investments,” says John Gottfurcht, SSI’s founder and president.
George Douglas, chief investment officer at SSI, adds: “Our entire team is excited about, and is looking forward to, our partnership with American Beacon and Resolute, and benefiting from the synergies and shared values between our two firms.”
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