Schroders launches Avoca Credit strategy on GAIA platform
Schroders is pleased to announce the launch of another externally-managed fund on its Schroder GAIA platform, Schroder GAIA Avoca Credit (the ‘Fund’).
Schroders is pleased to announce the launch of another externally-managed fund on its Schroder GAIA platform, Schroder GAIA Avoca Credit (the ‘Fund’). The Fund is a fundamental credit long short strategy, and is scheduled to launch in November 2013. Schroder GAIA (Global Alternative Investor Access) is Schroders’ alternative UCITS platform designed to offer investors access to hedge fund strategies in the liquid, transparent and regulated UCITS format.
The fund will be managed by Simon Thorp and James Sclater from Avoca Capital Management LLP (‘Avoca’), who have run this strategy for 13 years. Avoca’s existing UCITS fund, the Avoca Credit Absolute Return Fund, will merge into Schroder GAIA Avoca Credit upon launch. The Fund will be benchmark unconstrained aiming to deliver an annualised return of 7-10% net of fees. The Fund will focus predominantly on European corporate credits and financials with smaller allocations globally, including to emerging markets.
Simon and Avoca’s credit long/short team will use the same fundamentally driven research process employed in Avoca’s credit long/short strategy, which has produced an annualised net return of 9.8% and delivered positive annual returns every year since 20021. This process aims to identify and exploit mispriced improving and deteriorating credits on the long and short side respectively. The Fund will invest in the full credit spectrum using instruments such as corporate bonds, CDS, credit indices, investment grade and high yield index options and sovereign debt.
Simon Thorp, Chief Executive Officer Avoca Capital Management LLP, said:
“We are very pleased to be partnering with Schroders, which has established one of the leading alternative UCITS platforms. Having successfully managed this strategy for over a decade, we are excited to be able to offer it to a wider audience via the Schroder GAIA distribution network. We are currently seeing a strong investment case and wealth of alpha opportunities within the long/short credit space as we enter the mature part of the credit cycle and an upturn in the interest rate cycle. We look forward to contributing to the diversification of Schroder GAIA’s offering.”
Eric Bertrand, Director of Schroder GAIA, added:
“We are constantly on the lookout for high-quality hedge fund managers to join our Schroder GAIA platform and believe that Avoca’s credit long/short strategy will be a complementary addition. This partnership provides an exciting opportunity to combine Schroders’ distribution framework and extensive resources with Avoca’s considerable experience and expertise in managing credit long short strategies.”
The Schroder GAIA platform was launched in November 2009 and has now reached €1.8bn in assets under management2. It combines the strength of Schroders’ renowned asset management expertise and extensive distribution capability with leading hedge fund managers. GAIA offers access to liquid alternative investment strategies with moderate to low correlations to mainstream market returns within a Luxembourg mutual fund format subject to the ‘gold standard’ UCITS regulations.
Schroders currently has five funds on the platform, three managed by external hedge fund managers (Schroder GAIA Egerton Equity, Schroder GAIA CQS Credit and Schroder GAIA Sirios US Equity) and two managed internally (Schroder GAIA QEP Global Absolute and Schroder GAIA Global Macro Bond).
1 Avoca Capital Management LLP, as at 31st July 2013.
2 Schroders, as at 30th August 2013