La Française AM and S&P Capital IQ launch global credit fund
Paris-based La Française AM and S&P Capital IQ have launched a global credit fund as part of a Luxembourg-domiciled SICAV (LFP S&P Capital IQ Fund).
The LFP R2P Global Credit’s investment universe is intentionally broad so as to capture all potential opportunities available on the bond market, a statement said.
The partnership between La Française AM and S&P Capital IQ was announced in June.
“In a climate where accurate credit market knowledge is crucial, La Française AM and S&P Capital IQ have signed an agreement that marries La Française AM’s extensive experience in fixed income management (5.4 billion €uros is Assets under Management – open funds) with S&P Capital IQ’s expertise in credit analysis,” says Patrick Rivière, managing director of La Francaise AM.
“The launch of the LFP R2P Global Credit fund is the first milestone in a long-term and unique partnership with great potential.”
The portfolio will be comprised of at least 90% Investment Grade instruments and at most 10% High Yield instruments, with the objective of outperforming the Barclays Global Aggregate Corporate Hedged € Index (or $ index). It will also have significant exposure to the US corporate bond market.
Exchange rate risk is systematically hedged.
While portfolio construction and execution is ultimately the responsibility of La Française AM, both partners will contribute to the investment process.
“In such demanding and changing financial markets, the key to success is in creativity, collaboration and innovation,” said Lou Eccleston, President of S&P Capital IQ.
As part of S&P Capital IQ’s role of non-discretionary advisor, the fund will use the firm’s proprietary Risk-to-Price (R2P) analytical methodology, which scores bonds with a relative measure according to how well they compensate investors, through yield, for associated market and credit risks.
As a multi specialist asset manager, La Française AM has a conviction-based approach which aims to appeal a wide customer base, both in France and internationally, including institutional investors, networks, banks, financial advisors and private investors.
It has some €36bn in assets under management with its dual core competencies of real estate and securities. Its shareholder structure comprises Crédit Mutuel Nord Europe, alongside company directors and employees. The Asymmetrical management philosophy aims to limit capital risk in bear market environments, with a potentially lower performance in bull market environments. The objective is to capture 70% of market rises and limit loss to 30% of market falls.