Fundamental changes in the banking sector coupled with recent market dislocation have created a multitude of opportunities in emerging market credit (EMD), including a number of names trading at depressed levels, some below intrinsic recovery values.
Strategy overview
This strategy focuses on global seeking high quality credit EMD investment that offer a favourable risk reward profile, featuring relatively low leverage ratios and strong documentation.
- Potential for risk-adjusted returns for the same risk when compared with public markets
- Attractive income potential
- Smoother volatility profile given the "buy-and-hold" strategy
- Deep opportunity set given current market dislocation
- Secure documentation for EMD corporates (covenants, asset disposal restrictions, etc.) when compared to developed markets (cov-lite)
- Strong sourcing capability given BlueBay's market presence
- Leverages one of the largest and longest-standing group of EMD specialists in the investment management industry
Our approach
Investment strategy
Target a broad set of opportunities using a rigorous investment process
- Focus mainly on senior instruments
- Fully drawn commitments and a diverse syndicate of lenders/holders
- Proprietary origination channels, leveraging long-standing relationships
- Extensive due diligence using multiple sources
- Focus on full transfer and title ownership
- Leveraging the wider EM team's market knowledge of larger Global EM countries
- Industry agnostic with a focus on companies with hard assets and cash flow generative businesses across a wide range of industries
- Investment Size
- $15-25m USD ticket size
- 20-25 investments
- 2-3 years average holding period
Emerging market debt expertise
- We manage in excess of USD$10bn and have established ourselves as one of the most respected asset managers in this space.
- Our expertise covers the full spectrum of emerging market sub-asset classes – from traditional benchmarked single sector strategies to unconstrained strategies and hedge funds. Our diversified investor base entrusts us with managing assets incorporating standardized as well as customized, client-specific requirements.
- The BlueBay Fixed Income Team has always endeavoured to be at the forefront of development and innovation in the market as the asset class has evolved and has consistently been one of the first movers in new asset classes, whether in local currency debt, corporate debt or EM alternatives.
- We are an active manager, and our philosophy is rooted in the belief that EM remains an inherently inefficient asset class – there are price discrepancies which can be exploited in meaningful size to generate strong risk-adjusted returns.
- Our long track record in multiple products demonstrates an ability and keen willingness to potentially generate returns through superior and meticulous research, strong risk management and a focus on capital preservation.