Specialist fixed income manager, BlueBay Asset Management (BlueBay), has launched the BlueBay Diversified Alternative Credit Fund in response to client demand.
The new fund is designed to provide investors with a single point of access to BlueBay’s best ideas in long/short credit across liquid and less liquid markets, in a European structure, a Dublin ICAV (QIAIF). The fund is intended to appeal to both institutional investors and wealth managers seeking a more flexible approach to generating returns in the changing market environment.
The fund’s objective is to achieve enhanced risk-adjusted returns from investing across a diversified range of unconstrained and uncorrelated strategies and targets a net annualised return of cash plus 8 per cent.
Investors can gain exposure to a wide opportunity set in global credit markets through diverse sub-strategies, with proven track records. BlueBay believes this combination of strategies is best placed to capture the changing opportunity set in global risk markets including divergent monetary policy, the rise of illiquidity premiums, greater bond dispersion and increased market stress.
The underlying strategies offer a spectrum of flexibility and illiquidity exposure and include Global Credit Alpha Long Short, Event Driven Credit and Emerging Market Credit Alpha. These strategies have been combined to provide the optimal balance of return and volatility while covering a wide universe to maximise the opportunity set within bond markets. Management and incentive fees are only charged at the fund level.
The BlueBay Diversified Alternative Credit Fund will be overseen by BlueBay’s Multi Asset Decision Group, while each underlying strategy is managed by the respective portfolio managers.
Speaking about why the new fund is relevant for investors, Blair Reid, Senior Portfolio Manager at BlueBay, says: “We are now at an inflection point in global risk markets as we transition from an era of quantitative easing to a period of quantitative tightening, coupled with a progression in the credit cycle. With the onset of increased volatility a flexible, unconstrained approach to credit selection orientated strategies is the best way to capture alpha opportunities.”
“BlueBay has a strong track record in alternatives and, as a firm, we sit at the convergence point between alternative managers and traditional long only managers. As such we are ideally placed to provide investors with an investment solution that can capture alpha opportunities through changing stages in the credit cycle.”
The fund offers monthly subscriptions, with quarterly redemptions, and already has assets under management of over USD90 million, including seed capital and client investments.