Neuberger Berman has announced the launch of a new global credit long / short fund, aimed at offering investors risk controls in an environment of tightening spreads.
The fund is managed by Norman Milner and alongside Rick Dowdle, Darren Carter and Itai Baron. The managers, who are based in London, have worked together for nine years and have an average of 18 years of experience, joined Neuberger Berman following the purchase of Orchard Square Partners last year. The team is also supported by an additional seven professionals.
“While credit quality in general remains historically robust among developed market corporate bond issuers, default rates are forecast to rise and higher interest rates could have an impact on flows in the market,” Milner says. “In an environment of tight spreads and even tighter liquidity, increased volatility in credit markets would not be surprising going forward. This means investors may now need to be more creative to control their risk.”
The team applies a bottom-up credit analysis aimed at achieving equity-like returns from securities higher up in the capital structure. The team only invests in large-cap liquid credits – with no structured credit, distressed or private debt. They also employ systemic hedges to protect capital as the portfolio re-positions.
It is a sub-fund of the Irish-domiciled Ucits fund umbrella, Neuberger Berman Investment Funds plc. It is registered in the UK and will shortly be registered for sale across Europe.