Fund Management

Muzinich & Co Launches European Credit Strategy With Downside Risk Protection

Tom Burroughes, Group Editor, London, 23 January 2018

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With credit spreads at relatively narrow levels and interest rates creeping up in certain places, the fund aims to give clients opportunities for returns but also with downside protection.

Muzinich & Co, the group of investment firms, has launched a new European-focused total return credit strategy targeting enhanced returns and reduced downside risk against large drawdowns, a possibility it sees amid tight credit spreads and a path of rising interest rates. 

Called the Muzinich European Credit Alpha Fund, this is a sub-fund of Muzinich’s Irish-domiciled UCITS range and will be managed by Thomas Samson. He will be supported by assistant portfolio manager Hugo Squire.

“We have a constructive outlook for credit for the years ahead,” said Samson. “However, with current corporate credit spreads at low levels and rates beginning to move upwards, we believe a long/short strategy gives us the flexibility necessary to deliver attractive returns.”

The fund aims to generate mid-to-high single-digit returns over the course of a full market cycle. This long/short, total-return credit strategy seeks to predominantly invest across European credit markets in strong conviction trades. The strategy is based around three main books: “Core Long”, “Arbitrage” and “Overlay Portfolio” and aims to use a diverse range of instruments including cash instruments, floating and fixed-rate instruments, loans and derivatives.

Muzinich & Co is a privately owned, institutionally focused group of investment firms specialising in public and private corporate credit. The organisation was founded in New York in 1988 and has offices in London, Frankfurt, Madrid, Manchester, Milan, Paris, Singapore, Zurich and Dublin. It has more than $36 billion of assets under management. 

 

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