JP Morgan Asset Management is set to launch a new Sicav strategy, JP Morgan Funds – Global Capital Structure Opportunities, which will be available to investors from 19 February 2015.
The Global Capital Structure Opportunities fund will aim to provide the potential for capital growth by seeking out the most appropriate instrument within a company’s capital structure.
Building on the firm’s existing convertible bonds expertise, the fund will use bottom-up security selection to identify exposure that offers the best risk/reward profile within the capital structure of the highest conviction companies, including equities, bonds and convertible bonds.
The fund, which will take an unconstrained, flexible investment approach to investing exclusively in corporate names, will have a typical allocation range balanced across different instruments, including equities (0%-30% of the portfolio), convertibles (10%-50%), corporate bonds (40%-80%), and cash (0%-30%).
The fund will invest in the highest conviction companies, diversified by region, sector, and company profiles. It will target a return of 2% over its benchmark (80% Barclays Global Aggregate Corporate Index (Total Return Gross) Hedged to EUR / 20% MSCI World Index (Total Return Net) Hedged to EUR).
The Global Capital Structure Opportunities fund will be managed by investor Antony Vallee (pictured), global head of Convertible Bonds and Capital Structure Funds at JP Morgan Asset Management. Co-managing the fund will be Robin Dunmall and Natalia Bucci.
Vallee, who currently oversees $5.6bn (€5bn) in assets under management, is manager of the JPMorgan Funds – Global Convertibles fund (Sicav).
He is also manager of the UK investment trust JPMorgan Global Convertibles Income Fund, the only closed-ended fund investing in global convertible securities with a focus on income. At the time of its launch in 2013, the investment trust initial public offering was the largest ever for JP Morgan Asset Management, raising £136m (€186.7bn).
“With this fund, we wanted to bring together our deep fundamental knowledge of companies to pick the best opportunities, agnostic of which instrument in the capital structure space, in order to offer strong total returns with a cautious risk profile,” said Vallee. “The result is a diversified, high-conviction portfolio.”
“In the increasingly urgent search for diversification, many investors are looking for asymmetrical risk/return characteristics. This fund delivers that diversification with the flexibility to explore up and down the capital structure, allowing the managers to exploit the relative value within and between companies,” said Massimo Greco, head of European Funds, JP Morgan Asset Management.