Lombard Odier Investment Managers (LOIM) has launched its Fallen Angels Recovery strategy in Taiwan.
Fallen Angels Recovery is a differentiated high-yield strategy which seeks to invest in bonds that have been downgraded from investment grade to high yield.
LOIM pointed out that the price of fallen angel bonds is generally lower than that of similarly rated peers at the time of downgrades but subsequently recovers.
LOIM also pointed out that the annualised returns and Sharpe ratio of fallen angel bonds is 8.8% and 0.8 respectively, while for high yield bonds it is 6.7% and 0.54.
The portfolio comprises approximately 270 holdings, with an average BB+ average rating. The securities are selected based on fundamental analysis of the issuer, with sustainability an important criterion.
Fallen Angels Recovery currently holds $360m in assets under management.
Its launch also follows on the heels of the launch of the Asia Value Bond strategy in Taiwan last year by LOIM.
Navigate Investment Consultant serves as LOIM’s master agent in Taiwan.
“At LOIM we have a long-standing track record in delivering robust returns from crossover credit strategies and we believe our Fallen Angels Recovery strategy represents a similarly compelling investment opportunity for clients,” said Yannik Zufferey (pictured), chief investment officer for core business at LOIM.
“Our market leading investment team, which combines fundamental credit analysis and systematic capabilities, is committed to capture these opportunities. We are pleased to now offer this strategy and potential attractive returns to clients in Taiwan.”
“We are excited for the Fallen Angels Recovery strategy to enter Taiwan as we continue to broaden our offering for clients in the region. This will be the second strategy that we are launching in this important market, following a very successful introduction of our inaugural fixed income strategy in Taiwan last year,” said Vincent Magnenat, limited partner, Asia regional head and global head of strategic alliances at Lombard Odier,
“As a high-end investment firm with 228 years of global asset management experience, we look to offer investors attractive risk-adjusted return potential throughout market cycles with this high yield strategy, backed by our global, research-driven expertise and active approach.”
