The credit select and global credit funds both launch on October 23 and will be managed by Stephen Drew and Mehrdad Noorani.
The credit select fund will invest in high quality developed market corporate bonds, which will typically have an A credit rating. The fund may also invest up to 10 per cent in crossover credit. Credit select will use hedging techniques and has a target yield of 4-5 per cent per annum.
The global credit fund targets a 6.5 per cent yield and will invest in corporate bonds with an average credit quality of BBB or greater on a global basis. It can invest up to 40 per cent in strong high yield and emerging market credits.
Both funds will be Ucits III compliant and are listed on the Irish Stock Exchange.
The funds have an annual retail management fee of 1.5 per cent and a minimum investment charge of $10,000. Both funds have a performance fee, with credit select set at 10 per cent and global credit set at 12.5 per cent.
Drew says: “We believe that credit is in a ‘sweet spot’ and will outperform in most macro scenarios for a number of years. Credit offers advantageous risk-adjusted returns; as markets normalise, credit will produce superior performance.
“These funds have been launched to take advantage of cheap global credit issuance as emerging and developed market corporates roll over their loans through the bond market. I am excited by the opportunities which will present themselves over the next few years in the credit space and, aided by the experienced team at Thames River, am looking forward to taking advantage of them in the three funds.”