Schroders hones Asian convertibles research with key relocation
Dorian Carrell, global convertible bond analyst at Schroders, is relocating to Singapore next month underscoring the importance of the region to the asset manager’s €2bn convertibles program.
Once in Asia Carrell, who splits his time now between Zurich and London, will be a dedicated Asian convertibles analyst.
Asia was the fastest growing market for convertibles last year.
Carrell said: “From a long term perspective we think Asia represents a fantastic opportunity and the convertible market there is underdeveloped, but there the characteristics of companies lend themselves to convertibles.
“Companies that issue them are typically small- and mid-sized and trying to finance their growth, which typifies companies in the fast-growing economies, and we expect that will continue because of rising rates and rising equity markets, which are ideal conditions for issuing convertibles.”
Schroders is also examining South America for its potential.
Its convertibles program is run in conjunction with Swiss specialist Fisch Asset Management.
Kurt Fisch, FAM’s chief executive, said: “Given that we now run over $1bn in Asian convertible funds, we are allocating increasing resources to the region as we look to deepen our capability in this highly exciting and under-researched growth area.
“We estimate Asian convertibles will continue to grow rapidly, offering companies a lower cost of finance in what we expect to be a rising interest rate environment. At the same time, investors can capitalise on defensive, relatively low volatility exposure to some of Asia’s fastest growing companies.”
Schroders has nine managers in convertibles and seven dedicated credit analysts. Its convertibles trading desk analyzes market dynamics and liquidity.
Carrell says such a large team is necessary, in part, because of the complexity of the instruments including the fact investors can hold them for a number of reasons during their life, relating variously to credit, volatility or their link to equities.