Dutch investment firm Kempen Capital Management (Kempen) has unveiled the Kempen (Lux) Euro High Yield fund, aimed to invest in the BB-segment of the high yield market.
The strategy’s approach focuses on quality and managing downside risk. Kempen’s new fund is available for sale to institutional and wholesale investors, including retail banks, in the Netherlands as well as in the UK, Italy, Germany and France.
Acoording to Kempen’s senior portfolio manager Rik den Hartog, BB-rated bonds present one of the most attractive risk-return profiles of all rating buckets “as it contains structural anomalies that provide opportunities for investors with a more flexible approach.”
“The combination with subordinated bonds improves the risk-return profile of the fund,” he said.
den Hartog also underlined high yield investors should take extra care to search for quality.
“Certainly now complacent markets could drive a disconnect between fundamentals and risk premia. The additional return gained by moving into more risky companies is at historically low levels, therefore hardly compensating for the additional risks involved. A focus on quality is at the heart of our philosophy,” he commented.