Difficult markets attract assets to liquid credit strategies
Tue Mar 6, 2012
In an occasional series about under-represented strategies within the UCITS wrapper, Joy Dunbar editor of Absolute UCITS, explores the potential opportunities in the credit sector.
Credit was the most popular asset class in terms of attracting assets into new funds in the alternative UCITS sector in 2011. The Absolute UCITS global alternative UCITS new fund survey showed that there were six new credit funds launched in 2011.
More than $1.3 billion poured into new credit funds last year, according to the Absolute UCITS global new fund survey for 2011. A trio of UCITS credit funds topped the largest new funds for 2011 – BSF European Credit Strategies, Pictet TR-Kosmos and Schroder GAIA CQS Credit (see below table).
There are now around 15 credit funds trading that use the UCITS wrapper, according to the Absolute UCITS database. In Europe, where the offshore sector is more established and not constrained by liquidity and certain regulatory requirements, credit returned an average of 8.5% in 2011.
The weak economic environment and risk aversion across financial markets appears...
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