SYZ Asset Management launches European income strategy

SYZ Asset Management, the asset management arm of SYZ Group, has expanded its range of high-alpha European strategies with the launch of the OYSTER Continental European Income fund.

The new fund will seek to generate income from under-invested areas in European markets (ex-UK). The Luxembourg SICAV fund will be managed by SYZ Asset Management’s head of European equities, Michael Clements.

The income strategy of the OYSTER Continental European Income fund targets a yield that is at least 10% above that of the index (MSCI Europe ex-UK). The fund arrives on the back of increased demand from investors, who have struggled to find quality yielding solutions. SYZ’s London-based European Equities team has successfully managed the OYSTER Continental European Selection fund since 2014, returning +48.3% over three years compared to the MSCI Europe ex-UK index, which returned +32%.

Crowded markets
The new strategy applies a similar investment approach to the OYSTER Continental European Selection fund: an all-cap, high-conviction and contrarian portfolio that seeks to generate consistent alpha from rigorous bottom-up stock selection and fundamental research. However, as the new fund is aimed at investors seeking an income as well as capital growth, the fund will also apply a further element to the process, identifying companies that deliver a sustainable and growing dividend.

Since the financial crisis, income investors and asset allocators have had to contend with record-low interest rates. This fund is designed to provide an attractive alternative equity income source in a market where many traditional income sources are widely held and could be considered expensive in terms of valuation.

Michael Clements, head of European equities at SYZ Asset Management, explained: “Across our European high-alpha range, we focus on top-quality companies that have long-term competitive advantages, but where valuation may be reflecting short-term pressures, or negative sentiment towards the company or the sector in which the company operates. The new strategy now also allows income investors to harness our time-tested approach and gain access to underinvested areas.”

Clements added: “Most European income funds focus on traditional high-yielding sectors, such as utilities and telecoms. However, we have a different perspective, which often leads us to contrarian positions in less obvious areas. This fundamental long-term approach aims to deliver a consistent steam of yield, but also an attractive diversification element compared to existing income funds.”

Christopher Copper-Ind
Christopher Copper-Ind is Publisher and Editor of International Investment. His previous publishing experience focused largely on the Middle East and emerging markets, and he was Editorial Director of The Business Year, based in Istanbul, for three years before moving back to London in 2017. He is the author of How to Negotiate, to be published by Macmillan in 2019.

Read more from Christopher Copper-Ind

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