Schroders launches distressed debt fund

Schroders has announced the launch of its new GAIA II NGA Turnaround fund, an externally managed strategy offering investors access to the distressed debt market.

The fund will be managed by New Generation Advisors (NGA), which has 26 years of experience of investing in the asset class.

The fund aims to offer investors returns which are uncorrelated to traditional traditional strategies by taking long- short positions in distressed corporate bonds, predominantly in North America.

The fund will be managed by George Putnam III, founder and fund manager at NGA, Putnam has been in charge of NGA’s flagship corporate bond fund, which received an annualised return of 11.1%.

Putnam comments on the launch: “Given the record volumes of outstanding debt of poor quality, the range of distressed bonds is likely to increase over the next quarters. Even if it will take a little while for the flood of defaults to materialise, there are always distressed securities with good opportunities to be found. Even if the general outlook is stable, businesses will always make mistakes and our management team has the ability to capitalise on these opportunities like no other.”

The Schroders GAIA II NGA Turnaround fund aims to achieve an annual return of 8-12% including management fees, at a volatility of 10-12%.

Mona Dohle
Mona Dohle speaks German and Dutch, she is DACH & Benelux Correspondent for InvestmentEurope. Prior to that, she worked as a journalist in Egypt and Palestine. She started her career as a journalist working for a local German newspaper. Mona graduated with an MSc in Development Studies from SOAS and has completed the CISI Certificate in International Wealth and Investment Management.

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