KBL merges pair of high yield bond funds

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Luxembourg-headquartered KBL European Private Bankers has announced the merger of the Richelieu Bond – Richelieu 2020 fund into the Richelieu FD – Bond Euro Short Term, effective 22 May 2018.

In a shareholder notice seen by InvestmentEurope, KBL explains the merger of the funds, part of the Richelieu Investment Funds range and managed by the private banking group’s asset manager Kredietrust Luxembourg, results from the evolution of the European high yield market.

Expectations around further performance of the Richelieu Bond – Richelieu 2020 fund are considered very low by the firm given its investment horizon whereas the absorbing fund, Richelieu FD – Bond Euro Short Term, presents a more defensive profile while its philosophy nears that of the absorbed fund.

The Richelieu Bond – Richelieu 2020 strategy was launched in 2015, investing with no geographic limitation, in a diversified portfolio of bonds, mostly high yield, issued by private companies with a maturity of at the most six months after 31 December 2020. It had €120.88m of assets under management as of 29 March 2018 and returned 2.2% over 2017.

As for the Richelieu FD – Bond Euro Short Term fund, whose inception dates back to 2016, it invests mainly in euro-denominated bonds denominated with, at the moment of acquisition, a rating above BB+ and can be exposed to money-market instruments and/or high-yield bonds with a rating above B- and or unrated bonds. Duration does not exceed six years in the fund.

It had €115.56m in AUM as of end-March 2018 and delivered 1.2% returns over 2017.

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