Fixed Income  

Hermes launches multi strategy fixed income fund

Hermes Fund Managers has launched a multi strategy fixed income aiming to deliver absolute returns.

The Hermes Multi Strategy Credit fund will target a 7 per cent annualised return through the market cycle but will also look to generate “positive absolute returns on a rolling 12 month basis”.

Hermes said the aim would be to deliver “high-yield-like returns, with significantly lower volatility, and capital preservation characteristics”.

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The new fund will be managed by Fraser Lundie (pictured), co-head of Hermes credit and senior credit portfolio manager, and Raphael Muller, senior credit portfolio manager.

Mr Lundie said the fund would combine “high-conviction, long-only investments with a range of defensive market-neutral trades”.

The relative value strategy will look to invest globally across fixed income asset classes.

The fund has been launched with assets of $242.1m (£144m) and is domiciled in Dublin with a base currency of dollars but a sterling hedged share class.

Mr Lundie and Mr Muller have been managing the strategy on which the new fund is based since June 2013 and have generated a return of 11.1 per cent.

The two managers, along with Mitch Reznick, the other co-head of Hermes credit, have been managing relative-value credit strategies together since 2004.