London-based hedge fund manager Thames River Capital is launching Credit Select and Global Credit funds on 23 October 2009.  These funds are intended to complement its High Income fund by offering clients global credit products meeting differing client risk appetites and allowing diversification across both the credit spectrum and geographically.

The Thames River Credit Select Fund will invest predominantly in developed market corporate bonds on a global basis with an average credit quality of A. It may invest up to 10 per cent in crossover credit. The fund has a target yield of 4-5 per cent per annum with low to medium volatility. Its central objective is to obtain this running yield with minimal downside risk. The fund will use hedging techniques and aims to protect capital value during declining markets.

The Thames River Global Credit Fund will invest in corporate bonds with an average credit quality of BBB on a global basis, with a developed market focus. It can invest up to 40 per cent in strong high yield and emerging market credits. It will aim for low double digit returns (10-12 per cent) with single digit volatility and a target 6.5 per cent yield.  Both funds will be UCITS III compliant and listed on the Irish Stock Exchange. They will be sub-funds of Traditional Funds plc, a Dublin-based umbrella.

Thames River Capital investment director Michael Warren said: “With paltry returns on cash and interest rates predicted to remain low for some time, the idea for the Credit Select Fund was suggested to us by a long-standing client who was seeking a solution for his own clients’ cash.”