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£5 billion bond firm Avoca enters convertibles market
by Dylan Lobo on Sep 16, 2013 at 08:03
Avoca Capital Holdings has launched a convertible bond fund to meet increasing demand for the asset class in today's volatile climate.
The Luxembourg-domiciled Avoca Convertible Select Global comes after the boutique struck a strategic alliance with a team of convertibles specialists in November 2011. At the time the team, comprising Tarek Saber, Jasper van Ingen and Thomas Thoden van Velze, was plying its trade for Dutch-based APG - one of Europe’s largest pension funds - where they managed a convertibles portfolio worth around €6 billion (£5 billion).
Avoca Capital said it was seeing increasing demand from investors attracted to the combination of debt protection with equity upside participation.
The firm originally launched the fund in April 2012 but did not actively market it. According to the group, it has outperformed its UBS Global Focus Convertible Bond index since launch, with a 16% return up to 10 September.
Commenting on the launch, Avoca Capital co-chief executive Alan Burke said in a statement: '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, who serves as chief executive of the firm's convertible business, added: '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.'
Avoca Capital, which acquired a five-strong team from Liontrust in April 2011, controls some €6 billion (£5 billion) in assets and has bases in London and Dublin.
Its convertibles offering sits alongside its European loans, credit opportunities, long/short credit and structured and illiquid credit strategies.
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