Alternative Investment  

Fund aiming for 12% return launches

Fund aiming for 12% return launches

Axiom Alternative Investments has launched a credit derivatives fund targeting double digit net returns.

Axiom Credit Opportunity will aim for an annual net return of 12 per cent. 

The fund's strategy will focus on capturing value from structural price anomalies within the credit derivatives market.

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Axiom stated the fund will also take advantage of opportunities created by the ongoing regulation that forces banks to reduce their risk and improve their return on equity.

The fund aims to deliver stable and uncorrelated returns to traditional asset classes and maintain a market neutral profile, while embedding tail hedge features that protect performance from extreme market scenarios.

This will be achieved through a focus on liquid investment grade and high yield credit in Europe and North America.

The fund will be managed by Laurent Henrio, former global head of credit trading at Société Générale, who joined Axiom last year as portfolio manager.

He will be supported by Adrian Paturle, portfolio manager at Axiom, who has more than 20 years' experience in credit funds management.

Mr Henrio said: "I am excited to be a part of Axiom at this important stage in its growth, as we launch the first ever credit derivatives fund in our product range.

"We are pleased with the successful launch of the fund, both in terms of its performance to date and early progress in assets under management.

"This is a unique proposition in an uncrowded but growing market, which offers significant opportunities arising from the regulatory driven weighting on banks.

"We see the fund's strategy as a source of value for investors, offering true diversity and decorrelation from traditional asset classes."

Scott Gallacher, director of Rowley Turton Private Wealth Management, said the fund is targeting a niche market and would be cautious about the high returns Axiom is aiming for.

He said: "Anybody aiming for 12 per cent returns is being quite optimistic. Normal returns stand at inflation plus 1 per cent to 2 per cent.

"Also, high yield credit comes with lots of risks such as higher default risks, and with talk of a possible recession in Europe, these kinds of assets could take a knock."

Dippy Singh is a freelance journalist