The fund is being launched by the asset manager on its alternative Ucits platform, Global Alternative Investors Access, which offers investors easier access to structured hedge funds.
Schroder GAIA Avoca Credit Fund will be managed by Simon Throp and James Sclater from Avoca Capital Management, who have thirteen years’ experience of managing similar funds.
Avoca claims that this strategy – which aims to identify and exploit mispriced, improving and deteriorating credits on the long and short side respectively – has produced an annualised net return of 9.8% and delivered positive annual returns every year since 2002 (as of July 31 2013).
According to Schroders, the GAIA Avoca Credit Fund aims to yield an annualised return of 7 to 10% net of fees.
It will focus predominantly on European corporate credits and financials with smaller allocations globally, including emerging markets.
Avoca’s existing Ucits fund, the Avoca Credit Absolute Return Fund, will merge into Schroder GAIA Avoca Credit on the launch date.
Throp said that after a decade of successfully managing this strategy in the long/short credit space he was looking forward to being able to offer it to a wider audience via the Schroder GAIA distribution network.
“We are currently seeing a strong investment case and wealth of alpha opportunities within the long/short credit space as we enter the mature part of the credit cycle and an upturn in the interest rate cycle. We look forward to contributing to the diversification of Schroder GAIA’s offering,” he added.
Eric Bertrand, director of Schroder GAIA said that the firm was constantly on the hunt for high-quality hedge fund managers to join its platform.
“This partnership provides an exciting opportunity to combine Schroders’ distribution framework and extensive resources with Avoca’s considerable experience and expertise in managing credit long short strategies,” he added.
The Schroder GAIA platform was launched four years ago this November and has now reached €1.8bn in assets under management.
