Stratton Street backs rich nations as it tackles the West’s debt equation

Fri Oct 21, 2011

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Well ahead of the global sovereign debt crisis, Stratton Street dared to be a contrarian and invest in countries that were creditors, not debtors. In an interview with AsiaHedge editor Aradhna Dayal, London-based portfolio manager Andy Seaman gives his thoughts on the possible outcomes of the Eurozone debt crisis and his Renminbi Bond fund – the longest running strategy of its type in the Asian hedge fund space


Could you give us a brief synopsis of the funds you run? At Stratton Street we manage funds of just under $1 billion, the largest of which is EFG’s New Capital Wealthy Nations Bond Fund where we act as sub advisor. That fund invests in the wealthiest countries in the world and so, by definition, does not “index”. Index investing for bond fund managers is a nonsense in our view, as the biggest weights are given to the most heavily indebted countries and corporates. Instead, we invest in countries, and the corporates of those countries, who can most afford to repay their debts. Our Renminbi Bond Fund invests along similar lines, but is restricted to Asian fixed income investments. The fund was launched in November 2007. At the time the fixed income team believed the currency was undervalued (at the time of launch the CNY/USD exchange rate was 7.3875). We...

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