H2O Asset Management has announced the launch of the H2O Barry funds.
H2O Barry Active Value and H2O Barry Short, both Ireland-domiciled Ucits strategies, aim to address issues resulting from the scarcity of liquidity in the markets.
H2O Barry Active Value seeks to tap value from the new market environment, investing in money market instrument when markets are quiet and trading on short term in the event of a market shock.
H2O Barry Short aims to take advantage of sharp rises in global interest rates, while benefiting from a carry in excess of cash in-between these upsurges.
“Above and beyond its bearish positioning on G4 Govies, the fund derives a part of its value from the brutal and significant magnitude of interest rates rises, due to the lack of liquidity that banks can nowadays provide to govies market,” H20 explained.
H2O has plans to launch additional strategies in the Barry range in 2017 and 2018.
Next fund to be launched will be the H20 Barry Yield fund.
The strategy will derive its revenues from fees paid by banks looking to get a capital/liquidity relief benefit by entering into transactions that will decrease their risk weighted assets, hence the cost of capital associated.
“The objective of the Barry funds is to offer investment solutions leveraging today’s market predicaments and to turn these constraints impacting the performance of traditional asset classes into investment opportunities” said Bruno Crastes (pictured), CEO of H2O.
Commenting on the Barry Funds launch, Vincent Chailley, CIO, H2O Asset Management added: “The current financial system is definitely more robust as systemic financial crises are much less probable.
“However it is also characterised by more market distortions and it is prone to market shocks due to the massive drop in the liquidity provided by banks. The lower systemic risk makes these shockwaves less contagious and this pattern can offer attractive opportunities to flexible and responsive asset managers.”
H2O Asset Management managed €10.2bn in assets as of end of November 2016.