The BlueBay Global Credit Alpha Long Short Strategy aims to generate positive risk-adjusted returns by seeking to exploit dispersion, asymmetry and volatility in the market.
Strategy overview
- The investment universe includes cash and derivative instruments, corporate, sovereign and rate markets primarily in the investment grade space.
- Our rigorous, proprietary research of issuers and individual securities seeks inefficiencies in the market to identify where we believe the market has mispriced risk/return, indicating potential for asymmetric return profiles. By accessing our full toolkit of instruments, we have the ability to implement a range of long and short positions.
- The strategy offers diversified and uncorrelated exposure in an environment of divergence in global rates and growth.
Our approach
Investment strategy
- A long-short discretionary credit strategy investing in BlueBay Fixed Income Team's best ideas in liquid corporate and sovereign credit across global markets.
- The strategy seeks to perform in all market conditions and adopts a beta-neutral long/short investment strategy. It uses a combination of bottom up investment ideas, macro thematic investments and relative value trades.
- Targets a low correlation to credit, equity, emerging and developed markets
- Strategy permitted to take short positions in order to capitalize on negative market views or exercise relative value pairs trades
- Invests in smaller deal size opportunities
- Concentrated portfolio, average position size varies between 5-15% of portfolio and held for 1-3 months
- Very active and agile portfolio, with strong risk control framework
- There is no natural bias to being long credit. Individual risk exposures are based on well-researched, medium-term structural investment decisions.
- The BlueBay Fixed Income Team believes that taking into account environmental, social and governance (ESG) factors is an important aspect of the investment process. As such, ESG integration – the systematic review of material ESG investment risks – is applied across all our strategies.
Global investment grade expertise
- Benchmark aware but benchmark agnostic – alpha focus
- Very experienced team/analysts with a long/short investment mindset
- Strong focus on capital preservation
- Tends to perform best in negative risk markets, when issuer performance dispersion is high
- Extensive users of credit default swaps - both index and single name - to most efficiently implement investment ideas
- Hedge fund skills and tools within a disciplined investment process