Hermes launches global credit fund

Hermes launches global credit fund

Hermes Investment Management, which runs £33.6bn, is offering investors a new fund.

The Hermes Unconstrained Credit fund already has investor commitments of £185m, according to the company.

It will invest in investment-grade and high-yield bonds, loans, credit-default swaps, asset-backed securities and other credit derivatives.

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The fund manager describes it as a "high-conviction, multi-sector credit solution that is structured to perform throughout market cycles".

The investment process for the UCITS fund combines top-down allocation across the global liquid-credit sector with bottom-up, high-conviction picks.

It also seeks to manage risks within the prevailing market environment.

Andrew Jackson,head of fixed income at Hermes, said: “We view flexibility and risk management as the most important tools in any fixed income asset manager’s toolkit. 

"Together with our highly skilled, integrated team with expertise across the liquid-credit markets, asset-based lending and derivatives, we seek to further diversify the underlying universe of global assets, extend the ability to deviate meaningfully from benchmarks, and to fully utilise the range of credit instruments as risk mitigation tools.”

Mr Jackson and Fraser Lundie, co-head of credit and lead credit portfolio manager, will manage the fund.

Speaking about the new fund, Mel Kenny, chartered financial planner for London-based Radcliffe & Newlands, said: “Flexible mandates will help market bond funds as the investment world continues to agonise with itself over the role of bubbly bonds in investment portfolios.”