Lombard Odier Investment Managers (LOIM) today announces the launch of its Liquid Global High Yield Strategy, an innovative strategy which uses high-quality liquid cash bonds and credit derivatives to provide liquid, efficient exposure to high yield markets. This efficient exposure aims to deliver higher Sharpe ratios and long-term outperformance over traditional high yield indices.
Developed by an experienced investment team, the strategy is managed by Anando Maitra, PhD, CFA, who is also a co-manager on fixed income funds including the fallen-angels and crossover strategies. The management team also includes Jamie Salt, Portfolio Manager, Sandro Croce, Fixed Income CIO, and Jérôme Collet, Head of Systematic Portfolio Management. Constructed with a combination of treasury bonds and credit-default swap indices, the strategy solves the persistent liquidity and cost issues affecting high yield fixed income investors by minimising transaction costs and ensuring a high capacity for quick investment and liquidation.
Informed by LOIM’s proprietary research, the objective of this innovative approach is to enable the strategy to outperform high yield benchmarks while remaining liquid, even in market stress situations, with additional benefits in tail risk hedging, duration control, and cash flow optimisation. These features make the strategy suitable for both strategic and tactical asset allocation and is the latest in a series of innovative strategies developed by LOIM’s market-leading research and investment teams.
Anando Maitra, PhD, CFA, Lead Fund Manager and Head of Systematic Research & Strategies at LOIM, stated: “Investors seeking to benefit from the long-term returns offered by this asset class have often had to contend with high transaction costs and the risk of liquidity crunches and drawdowns. The Liquid Global High Yield Strategy allows investors to access those upsides while removing the pain of implementation, ultimately providing a more efficient way to gain high yield exposure.”
Jean-Pascal Porcherot, Co-Head of LOIM and Managing Partner at Lombard Odier, commented: “We believe fractured liquidity in the high-yield bond markets creates the need for an efficient alternative: one that solves liquidity stress – especially in volatile environments – and provides consistent outperformance potential with downside mitigation. With the launch of this strategy, we meet this need, bringing to bear the skill and expertise of our specialised team that has a proven track record in managing quantitative strategies with alpha generation, including more than 10 years’ experience in credit derivatives.”
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