Alma MidOcean Absolute Return Credit
Alma MidOcean Absolute Return Credit employs an absolute return long/short approach to investing in liquid high-yield bonds.
The fund’s management is delegated to MidOcean Partners.
Cumulative Performance (%)
Fund Inception 13 January 2016
The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance quoted. The investment return and the principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
Strategy & Manager
The Strategy is designed to capitalise on structural and technical inefficiencies in the liquid credit markets, especially on the short-end of the credit curve. MidOcean deploys a systematic and repeatable credit investing process in low duration credit and relative value trading, paired with tactical hedging, which in combination produce high-yield-like returns with less volatility and more downside protection.
MidOcean typically constructs the portfolio with a net long bias and will seek to dynamically adjust the Fund’s net credit exposure and market exposure to optimise the portfolio’s risk profile given the prevailing market conditions.
MidOcean Partners is a New York-based alternative asset manager established in 2003 that specializes in middle market private equity and alternative credit investments. MidOcean Credit started in 2009 and manages over $8 billion across a series of alternative credit strategies, collateralized loan obligations (“CLOs”), and customized separately managed accounts.
Portfolio Manager, Investment Committee
Ryan Dean is a Portfolio Manager of the MidOcean Absolute Credit Fund and for certain customised credit strategies. Mr. Dean is responsible for daily oversight of the portfolio and actively works with the research team to identify and evaluate absolute return and total return investment opportunities in performing credit situations. He is also a member of the Firm’s Investment Committee. He has covered several industries during his career including Automotive, Aerospace & Defense, Business Services, and Industrials. Mr. Dean has 13 years of experience in the financial services industry predominantly in fixed income credit research and trading. Prior to joining MidOcean Credit Partners in 2013, he was a research analyst in the High Yield Credit Research group at J.P. Morgan where he covered the Industrials and Services sectors. He also was a member of a research team that received #1 for the Services sector and #2 for the Industrials sector by Institutional Investor’s annual All-American High Yield Fixed-Income Research rankings. Mr. Dean received a B.S. in Finance from Lehigh University.
Principal, Portfolio Manager
Michael Levitin is a Portfolio Manager of the MidOcean Absolute Credit Fund and for certain customised credit strategies. Michael is responsible for daily oversight of the portfolio and actively works with the research team to identify and evaluate absolute return and total return investment opportunities in performing credit situations. Prior to joining the firm in 2015, Mr. Levitin was an Associate in the investment bank at Bank of America Merrill Lynch, specializing in originating high yield bonds and loans. Previously, he was a Senior Analyst with MetLife’s distressed investments group.
Statistics & Commentary
The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance data quoted. The investment return and the principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.
Sector Breakdown as a % of AUM
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Investment Manager's Commentaryas of 31/10/2023
The Alma Platinium IV MidOcean ARC (the “Fund”) returned -0.26% in October, outperforming the BAML US High Yield Index (the “Index”), which was down -1.24% for the month. During October, the tragic events in Israel led to increased geopolitical risk as a new variable for markets to digest, but once again rates continued their steady march higher. US Treasuries and US Investment Grade have now produced five consecutive months of negative returns, while US Equities followed suit and are now on a three month negative streak. During October, lower quality underperformed with CCCs -3.46% for the month vs. -0.69% in BBs. US Leveraged Loans remained resilient, producing a flat return in the month. October Fund performance was led by the short book, where both index and single name shorts were contributors. Despite the volatility in the market, the long book held up well, with strong coupon generation dampening the negative price action in the month. Notable detractors in the month were once again in the lower ratings spectrum (HY CCCs returned -3.46% in the month overall) as a couple of positions traded lower on limited company-specific news. During the month the Investment Team continued to build upon themes from September, with activity focused on the following: topping up shorter duration investment grade bonds, trimming certain lower rated positions that hit their fair value targets, and selectively adding to core positions in short duration that either continue to lag or have an above-market coupon. Looking forward, the Investment Team plans to continue to exercise caution around risk assets due to economic and geo-political uncertainty, and looks to stick to the core tenants of the strategy, reinforcing strong, bottoms-up credit analysis coupled with active short portfolio management.
Facts & Documents
Fund Domicile: Luxembourg
Fund Type: UCITS SICAV
Fund Launch: 13 January 2016
Base Currency: USD
Depositary, Administrator, Transfert Agent: CACEIS Investor Services Bank S.A.
Dealing: Weekly with a 3-day notice
Cut-off time: 3 pm CET
Management Company: Alma Capital Investment Management
Countries where the fund is registered:
Luxembourg, Austria, Germany, France, UK, Italy, Switzerland, Ireland
Environmental, social and governance (“ESG”) criteria have been integrated in the investment decision-making process. An ESG analysis is conducted for all issuers and a rating is given to each environmental, social or governance consideration relevant to the issuer. This is done prior to any investment, but also on an ongoing basis. Such analysis and rating will be integrated in the investment decision-making process. No index has been designated as a reference benchmark for this sub-fund. Further information can be found in the prospectus of the sub-fund. The extent to which the above-mentioned characteristics are met will be included in the annual report of the fund, as from the first report issued after 1 January 2022.
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