Modelled on Long/Short High Yield strategy run by Jason Horowitz for a decade
Alternative credit specialist CIFC has launched a long/short high yield UCITS fund managed by industry veteran Jason Horowitz, who has been running similar strategies successfully for over 10 years.
Mr. Horowitz joined the New York-based manager in January as Head of U.S. High Yield Bond Investments. He has been managing the strategy for CIFC since February 1, 2020, delivering a 12.69% net gain to the end of July, compared with a 0.18% loss for the wider U.S. high yield market.1 The strategy made positive returns during March at the height of market anxiety around Covid-19.
The UCITS fund, which mirrors the existing strategy, is designed to seek high single-digit returns while protecting capital in down markets. The strategy is offered as a new sub-fund of CIFC Credit Fund ICAV, a UCITS structure domiciled in Dublin.
CIFC London MD Josh Hughes said: "CIFC believes that this is the right time for a strategy like this, which has shown over the long-term that it can deliver attractive returns in all weathers. Jason has 25 years of investment experience and is supported by CIFC's strong credit research team. By launching the strategy within a UCITS fund structure we can open it up to a wider audience, including wealth managers and private banks, as well as European-based pension funds, family offices and other investors."
Mr. Horowitz previously worked at Millennium Management. Prior to that he spent 13 years at Muzinich Co., overseeing an award-winning long/short corporate credit hedge fund. He was joined at CIFC by Brandon Hole and Eric Seiden, who worked with Mr. Horowitz at Millennium Management as well.
Mr. Horowitz said: "I believe that the high yield market is well-suited for a long/short strategy because there are lots of market inefficiencies that create opportunities in either direction for those with the research capacity and technical expertise. CIFC has a 47-strong investment team, with 20 analysts who will all bring ideas to this strategy."
The strategy offered in UCITS form will seek to capture returns from four areas: identifying long/short opportunities through fundamental credit research; exploiting long and short technical opportunities and inefficiencies in different segments of the high yield market; investing in dependable credit from short-dated bonds with low-volatility characteristics; and arbitrage.
The CIFC Long/Short High Yield strategy has a number of features that CIFC believes will help to reduce downside risk. Mr. Horowitz said: "We regularly stress-test the impact of possible macro events on industries and companies to understand where the risks lie and how we might mitigate them. We have a strict sell discipline for when our thesis changes or the outlook changes. And, of course, the ability to short means where we see particular risk, we have the opportunity to turn it to our investors' advantage.
"We do not look to generate our entire year's return on one or two trades we seek to maintain a diversified portfolio by credit and sector and closely monitor liquidity risk to the individual positions and portfolio overall. We focus on beta-adjusted portfolio-level net exposure, average rating, duration and yield as opposed to using a black box approach that may break down during periods of heightened volatility. We think that this gives us a good feel for what our risk is at any given time.
"The Covid-19 pandemic is unparalleled, but we have experienced tough markets before, and though nothing is ever guaranteed, we can see lots of opportunities to protect the portfolio and generate strong returns."
Steve Vaccaro, CEO and CIO of CIFC, said: "Jason, Brandon and Eric have a vast amount of expertise and experience in the high yield market. When you add this to CIFC's existing deep bench of corporate credit research analysts, it makes for a compelling proposition. This fund demonstrates our commitment to continuing to expand the range and flexibility of our investment solutions for investors around the world."
About CIFC
Founded in 2005, CIFC is a credit specialist with over $26 billion of assets under management, specialising in corporate and structured credit strategies. Headquartered in New York, CIFC is authorised and regulated by the FCA and is a SEC registered investment adviser. It opened its London office in May 2018. Serving institutional investors globally, CIFC is one of the largest managers of senior secured corporate credit. For more information, visit: www.cifc.com
The material is for informational purposes only and should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. Certain products and services may not be available to all entities or persons.
Information about indices is provided to allow for certain comparisons of a fund or strategy to that of certain well known and widely recognized indices. Such information is included to show the general trend in the markets during the period indicated and is not intended to imply that the holdings of the fund or strategy were similar to the indices, either in composition, risk profile, expected returns and expected volatility. There is no representation that such index is an appropriate benchmark for such comparison. Such indices are not actively managed and therefore do not have transaction costs, management or performance fees or other operational expenses. The investment program of a fund or strategy is not restricted to the securities comprising such indices, and the volatility of the indices may be materially different from the volatility of the fund or strategy.
An investment in any fund involves risk; principal loss is possible. There is no guarantee a fund's investment objectives will be achieved. Past performance is not indicative of future results. The value of fixed income securities may decline significantly over short or extended periods of time. More information on these risk considerations, as well as information on other risks to which the UCITS are subject, such as concentration/non-diversification and investment strategy risks, are included in the UCITS' prospectus.
This release does not constitute or contain an offer, solicitation, recommendation or investment advice with respect to the purchase of the UCITS described herein or any security. Prospective investors should carefully consider objectives, risks, charges, tax considerations and expenses and other relevant information before investing. For this and more information on the CIFC Credit Funds ICAV, please request a prospectus and read it carefully before you invest in any particular sub-fund offered. Prospective investors should also consult their professional advisers as to the suitability of any investment in light of their particular circumstances and applicable citizenship, residence or domicile. CIFC Credit Fund ICAV has been authorized in Ireland as a UCITS pursuant to the European Communities (Undertakings for Collective Investments in Transferable Securities) Regulation, as amended.
Shares of CIFC Credit Fund ICAV are only available for certain non-U.S. persons in select transactions outside the United States in accordance with Regulation S promulgated under the United States Securities Act of 1933, or, in such other limited circumstances and transactions which are exempt from the registration requirements of the United States Securities Act of 1933, as amended and such other U.S. laws as may be applicable.
Certain share classes of the CIFC Credit Fund ICAV are registered for public offer and sale in the Republic of Ireland. Fund shares may be otherwise sold on a private placement basis depending on the jurisdiction.
1 Based on the ICE BofA US Cash Pay High Yield Index. Feb 1 to July 31, 2020. The index is unmanaged and therefore does not take into account the deduction of fees and expenses.
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