Nomura AM launches corporate hybrid bond fund
Julian Marks, manager of the Nomura Funds Ireland — Corporate Hybrid Bond fund
The Nomura Funds Ireland — Corporate Hybrid Bond fund aims to provide investors with a portfolio of bonds from high quality issuers that offers yield levels comparable to those of high yield bonds.
The strategy will be managed by Julian Marks, head of corporate hybrid bonds, who joined Nomura AM in January.
Prior to this, Marks worked at Neuberger Berman, where he was lead portfolio manager for the corporate hybrid bond strategy. He was also a portfolio manager on broader investment grade credit mandates.
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At Nomura, Marks and his twelve-member investment team of analysts and portfolio managers are responsible for analysing issuers and individual bonds on a fundamental and ESG basis.
The result of their multi-layered process is a concentrated portfolio of 30 to 40 issuers, about half of which are substantially overweighted.
Nomura said it was launching the fund to take advantage of a growing €194bn corporate hybrid bond market.
Marks said: «We believe this is a particularly favourable time to invest in corporate hybrid bonds, because the risk premiums are, on average, over 100 basis points above what we consider to be fair value.
»This means that there is considerable potential for price gains and furthermore, certain issuers are, in our view, significantly mispriced, creating good opportunities for active managers to generate added value for investors."
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Peter Ball, global head of distribution at Nomura AM, added: «In hybrid bonds, we see some of the best investment opportunities in the entire bond market. Only a few market
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