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Axiom targets credit market dislocation with new long/short hedge fund launch

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Axiom Alternative Investments, the USD1.7 billion French investment manager, has launched its first global long/short credit fund in a UCITS format, which aims to capitalise on investment opportunities arising out of credit dislocations following the coronavirus pandemic.

Axiom Long/Short Credit, run by portfolio manager Gilles Frisch, trades US and European high yield debt instruments, specifically cash bonds along with vanilla high yield derivatives.

Launched with an initial EUR30 million in assets, and targeting a 4 per cent annual return with a volatility target below 5 per cent over the credit cycle, the new fund positions itself around a core view that single B-rated credits are mispriced against double Bs.

Frisch, an investment management veteran of more than 25 years, joined Axiom in 2019 as a portfolio manager, having previously been head of high yield at Swiss Life Asset Managers.

Anecdotal evidence suggests the distressed credit and special situations sector has seen a spike in new hedge fund launches lately, in response to the impact of the Covid-19 crisis on markets earlier this year.

Commenting on the launch, David Benamou, Axiom Alternative Investments’ chief investment officer, said Axiom Long Short Credit offers an alternative risk/return profile to traditional long-only funds operating in the credit dislocation space.

“With an uncertain credit cycle and rising economic risks, we believe that this fund is perfectly placed to take advantage of the current market environment,” Benamou added.

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