The Hermes Multi Strategy Credit fund will aim to deliver high-yield-like returns with lower volatility, and also offer capital preservation characteristics. It has no benchmark and targets annualised returns of 7%.
Hermes has piloted the strategy since 1 June 2013, during which time it has returned 11.1% gross of fees according to the group. This encouraged it to distribute the fund, which has amassed $242.1 million in assets, to the wider market on 1 May this year.
'Five years into the high-yield bull market, investors continue to seek strong returns but are wary of valuation and liquidity risks. By combining high-conviction, long-only investments with a range of defensive market-neutral trades, the Hermes Multi Strategy Credit fund aims to consistently deliver positive risk-adjusted returns,' Lundie, co-head of Hermes Credit and manager of the Hermes Global High Yield Bond fund, said.
'With a truly global approach, we search the high-yield and investment-grade bond, credit derivative and loan markets across multiple geographies for securities with the best return prospects.'