Hermes Investment Management has a new fund to invest globally in debt markets, including bonds, loans and credit-default swaps.
The London-based asset manager announced Wednesday that its unconstrained credit fund was seeded by investors including Quilter Multi-Asset and has attracted investor commitments of £185 million ($245.6 million).
The firm, which manages £33.6 billion of assets, will be poised to profit during times of market volatility as the new fund has the flexibility to invest broadly in liquid credit markets. This includes corporate debt with investment-grade and speculative-grade ratings, as well as asset-backed securities and credit derivatives.
“Unrestricted by security type or geographical silos, our unconstrained approach allows us to maximize total returns by investing across the full credit spectrum,” Fraser Lundie, co-head of credit, said in the firm's statement. “As investment conditions change, we aim to capture superior relative value throughout credit markets and offer a dynamic credit-allocation solution to investors seeking to outsource their full credit exposure, or enhance more traditional allocations.”
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Lundie and Hermes head of fixed income, Andrew Jackson, will manage the new credit fund, which will use environmental, social and governance screens when investing.
“We view flexibility and risk management as the most important tools in any fixed income asset manager’s toolkit,” Jackson said in a statement. “It is for that reason that we continue to utilize security selection and ESG as primary tenets of our approach.”
Jackson was appointed as head of fixed income in April 2017 to help build Hermes’ credit and direct-lending investment teams, according to the firm's website.
Before offering the unconstrained credit fund, Hermes had four credit strategies: multi-strategy credit, absolute return credit, global investment grade credit, and global high yield credit, according to its website.