This is a marketing communication. Please refer to the prospectus and the KID of the fund, and, if necessary, contact your usual financial advisor before making any final investment decision. For professional investors only.
Tikehau Short Duration is a sub-fund of Tikehau fund, managed by Tikehau Investment Management. Investors' attention is drawn to the fact that any investment in a fund involves risks and that the financial objective may not be achieved. The main risks of the funds are the risk of capital loss, liquidity risk, counterparty risk, credit risk and sustainability risk. For a detailed description of all the risks, please consult the fund's legal documentation available on the Management Company's website.
Can you give an overview of the team running the fund and your investment process?
Benoit Martin has over a decade of experience in asset management and serves as Credit Portfolio Manager for Tikehau Short Duration. The strategy is underpinned by a disciplined investment process that combines dedicated analyst input with portfolio manager oversight.
The fund follows a team-based approach supported by 17 credit analysts across different regions. Analysts conduct fundamental issuer research, perform internal credit assessments, and maintain regular dialogue with management teams, while portfolio managers integrate macroeconomic, technical, and market considerations into portfolio construction and risk management.
A distinguishing feature of the strategy is its staggered liquidity profile . The fund relies primarily on bond selection rather than the use of derivatives to gain exposure to long-duration bonds before hedging duration risk . Instead, it invests in short-dated instruments that naturally mature or are called over a short time horizon. As a result, around 4 to 5% of the portfolio matures or is called each month, generating approximately €120 million to €150 million of recurring liquidity. This provides flexibility to hold cash when valuations are stretched, as in February 2020, or to reinvest when spreads become more attractive, as in 2022. In our view, this approach helps limit drawdowns and supports more stable recovery periods.
What do you see as the big opportunities and risks for your fund for the rest of the year and moving into 2026?
[1] Source: Tikehau Investment management, data as of 03/31/2026.
[2] Staggered liquidity means that liquidity is supported by the regular repayment of bonds held in the portfolio, allowed by the short duration of the Sub-Fund, except in the event of default.
[3] As of today, as a management choice, short duration is achieved solely through bond picking; derivatives (authorised by the prospectus) are used only for FX hedging. These modalities may change without prior notice.
Key risks remain a deterioration in growth, renewed inflationary pressure, further interest-rate volatility, and any widening of spreads should default expectations rise or market sentiment weaken.
That said, we believe credit markets are going through what can rightly be described as a golden age, with yields still offering compelling opportunities. Investors can now build portfolios around quality issuers with reasonable leverage and yields in the 4% to 6% range , without having to move into overly complex or refinancing-sensitive names to generate carry. Even high-quality issuers today provide attractive levels of income.
Volatility also remains relatively contained. The asset class continues to be supported by an investor base primarily focused on carry, as well as by still limited net bond supply . At the same time, we believe demand remains structurally strong and should continue to support market flows.
Moreover, in the current environment, where pressure persists at the long end of the curve, appetite for longer maturities remains limited, which further strengthens the case for short-duration strategies.
Overall, we continue to see credit as a core pillar of portfolio allocation, combining high-conviction security selection with today's still appealing yield levels.
How are you positioned in this environment?
Rising tensions in Iran have revived concerns over energy prices, a key issue for Europe given the potential impact on inflation. Against this backdrop, short-term rate moves remained meaningful over the period . Investors now appear to be ruling out an ECB rate cut this year and are even starting to price in the possibility of further hikes .
In this environment, Tikehau Short Duration, our flagship strategy in the short Investment Grade segment, has shown resilience.
As a reminder, the fund is built on a dual objective: preserving capital while generating alpha within the short-duration credit universe.
On the defensive side, the strategy maintains a short-duration profile, with interest rate duration at 0.9 years, and is primarily invested in Investment Grade bonds (65% of the portfolio as of May 8, 2026). This positioning, combined with staggered liquidity , is intended to enhance resilience, reduce sensitivity to rate volatility, and support a defensive risk profile.
At the same time, the fund seeks additional carry through selective opportunities in short-duration credit. This includes targeted exposure to segments such as High Yield and subordinated financial bonds, where rigorous credit selection can deliver attractive yield without materially altering the portfolio's overall risk discipline in our view.
We believe the portfolio is well positioned for the current market environment, with interest rate sensitivity of 0.94, an actuarial yield to maturity of 3.9% in EUR and 5.6% in GBP hedged , and a cash level of 6.9% .
[4] Source: Tikehau Investment management, data as of 05/08/2026.
[5] Source: Tikehau Investment management, data as of 05/08/2026.
[6] Source: Tikehau Investment management, data as of 05/08/2026.
[7] Source: Tikehau Investment management, Bloomberg, data as of 05/08/2026.
[8] Staggered liquidity means that liquidity is supported by the regular repayment of bonds held in the portfolio, allowed by the short duration of the Sub-Fund, except in the event of default.
Can you identify a couple of key investment opportunities you are playing at the moment in the portfolio?
Tikehau Short Duration invests mainly in short-duration Investment Grade bonds. The fund may also diversify into high yield and subordinated financials.
Subordinated financial bonds are a big conviction of the team. We believe that the fundamentals of the European banking sector remain solid, as evidenced by the earnings releases published quarter after quarter. Within financial bonds, we particularly favour Additional Tier 1 subordinated bonds, which offer what we consider to be attractive absolute and relative yields compared to corporate bonds (with an estimated average yield pick-up of around 1.4% between AT1 and corporate bonds with the same rating ). This allocation, averaging 23.7% of assets, was primarily composed of AT1 and Tier 2 securities, representing 12.7% and 10.4% of the portfolio, respectively . Within our AT1 exposure, we focus on bonds expected to be called within 12 to 18 months. Nearly all have already been pre-financed, reinforcing our confidence in their call likelihood. Since the fund's inception in 2009 , we've encountered only two non-calls in this segment: one in May 2020, and another in November 2022, which was called just three months later, underscoring our disciplined approach and deep expertise in this space.
[9] Source: Tikehau Investment management, data as of 05/08/2026.
[10] Source: Tikehau Investment management, Bloomberg, data as of 05/12/2026.
[11] Source: Tikehau Investment management, data as of 05/08/2026.
[12] In 2020, a UCITS fund domiciled in France and managed by Tikehau Investment Management was merged into Tikehau Short Duration. The investment objective, strategies, and risk profile of the former fund were very similar to those of Tikehau Short Duration.
