Algebris Investments is launching a Macro Credit fund, managed by the head of Macro Strategies and partner Alberto Gallo.
The fund, which will start trading on 19 July, has a strategy designed for today’s world of negative rates, reduced trading liquidity and increased economic and political volatility.
To survive this volatility, diversification and flexibility are paramount, Algebris said.
The new fund will adopt a “unique approach” to investing in bond and credit markets, combing top-down macro research, bottom-up balance sheet analysis and quantitative risk management, the asset manager said. The fund targets a volatility of 5% and aims at generating 6-7% returns.
It will invest in government, corporate and bank debt, capturing what the investment manager considers the best opportunities globally. It will employ a range of directional and relative-value (alpha) strategies. The investment team includes macro analysts Aditya Aney and Tao Pan.
“The asset management industry isn’t prepared to live with QE infinity. Most assets sit in benchmark-hugging strategies, offering increasingly less yield vs management fees. The investor reaction is typically to buy riskier products, like high-yield corporate funds. But this also means taking concentrated, undiversified risks,” Gallo said.
“We aim to offer a better solution,” he added.
“Alberto’s strategy will provide investors with a new, flexible approach to navigate the yield desert we live in,” said COO Alex Lasagna.