Kempen Capital Management has launched the Luxembourg-domiciled Euro High Yield fund, which targets "structural anomalies" in the BB-rated segment of the market, to European investors.
The fund, which is managed by Rik den Hartog, uses a disciplined process focused on quality bonds, while also managing downside risk
Amsterdam-based Kempen said the European high yield market has grown significantly over the last few years, and the BB-rated segment is ideally suited for investors that have a more conservative approach towards high yield investing.
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Den Hartog explained: "The BB-rated segment of the high yield market has one of the most attractive risk-return profiles of all rating buckets - as it contains structural anomalies that provide opportunities for investors with a more flexible approach.
"The combination with subordinated bonds improves the risk-return profile of the fund. "
"Certainly, now complacent markets could drive a disconnect between fundamentals and risk premia. The additional return gained by moving into more risky companies is at historically low levels, therefore hardly compensating for the additional risks involved.
"A focus on quality is at the heart of our philosophy."
The Kempen (Lux) Euro High Yield fund is open for sale to institutional and wholesale investors, including retail banks, in the Netherlands and is offered in UK, Italy, Germany and France.
The fund's management fee will be 0.32%, its service fee 0.10% and the taxe d'abonnement 0.05%, making the figure for total ongoing expected charges 0.47%.
