Stockholm (HedgeNordic) – Eight years after launching its multi-asset risk-on, risk-off strategy in a fund format, Danish boutique Asset Advisor is preparing to launch a second fund, this time focused purely on credit. The soon-to-be-launched fund will focus on small and mid-cap corporate bonds, leveraging the firm’s expertise in actively managing credit and interest rate risk using financial instruments.
“We believe there is a gap in the Nordic credit fund market for a focus on small and mid-cap sized corporate bonds, an area largely overlooked by the traditional asset management industry,” argues Christian Sand, Partner and Senior Portfolio Manager at Asset Advisor. Founded by Per Gramstrup (pictured), Asset Advisor has been investing in this segment for over a decade through mandates for institutional insurance clients. “We believe the timing is right to open this opportunity to wealthy individuals, family offices, and other institutional investors,” Sand adds.
“We believe there is a gap in the Nordic credit fund market for a focus on small and mid-cap sized corporate bonds, an area largely overlooked by the traditional asset management industry.”
Christian Sand, Partner and Senior Portfolio Manager at Asset Advisor.
According to Sand, focusing on the small and mid-cap spectrum in the Nordics offers a risk-adjusted premium compared to traditional high-yield mandates that invest solely in benchmark-sized issuances. “This premium exists because we invest in small, unlisted, unrated, and first-time issuers, which requires more thorough analysis,” he explains. Sand also notes that the higher level of interest rates has also made fixed income a viable alternative to bank deposits and a strong complement to equity exposure. “Lastly, we find the active management of credit and interest rate risk via financial instruments to be very rare for a credit fund.”
“The new fund helps our plan to grow the company by increasing assets under management and thereby aligns with our long-term goal of making Asset Advisor an evergreen brand.”
Christian Sand, Partner and Senior Portfolio Manager at Asset Advisor.
Asset Advisor’s upcoming credit fund will complement its existing product, Asset Opportunities, which relies on a dynamic and opportunistic multi-asset strategy that continuously assesses risk-on, risk-off sentiment in financial markets. This forward-looking approach enabled Asset Opportunities to achieve a 16 percent return in the challenging market conditions of 2022, with the fund delivering an annualized return of 6.4 percent and a yearly standard deviation of 8.7 percent since launching in late 2016. “The new fund helps our plan to grow the company by increasing assets under management and thereby aligns with our long-term goal of making Asset Advisor an evergreen brand,” concludes Sand.
