Groupama Asset Management, the investment arm of French insurer Groupama, has partnered with French boutique Axiom AI to launch the Groupama Axiom Legacy 21 fund.
The fund will be manageg by Axiom mainly invested in financial subordinated debt, so-called Legacy, issued before additional Tier 1 securities and that will lose their eligibility by 2021.
It seeks to outperform the Euribor 3m +3% over a rolling 4-year period.
The strategy aims to exploit opportunities in the transition faced by the European banking sector both in terms of economic cycles and regulation with the entry into force of Basel III.
Axiom AI will manage the fund.
“The Legacy debt universe is large. It is however put aside by investors because of the diversity of securities and the difficulty to assess how long they will last as regulatory capital,” said David Benamou, managing partner and chief investment officer of Axiom AI.
Some €165bn of Legacy securities were eligible for investments according to Bloomberg’s data as at end February 2017.