Nomura Asset Management (NAM) has launched a corporate hybrid bond fund open to investors across Europe.
The Nomura Funds Ireland – Corporate Hybrid Bond Fund aims to provide investors with exposure to high quality issuers with yields comparable to those of high yield bonds.
The strategy will be managed by NAM head of corporate hybrid bonds Julian Marks (pictured), who was hired in January with the intention of launching Nomura’s first corporate hybrid bond strategy.
Marks joined Nomura’s fixed income team from Neuberger Berman, where he was the lead portfolio manager for the corporate hybrid bond strategy. During his 15 years there, he was also a manager on broader investment grade credit mandates.
Aside from Neuberger Berman, Marks has worked at Commerzbank, Barclays Global Investors, and Mercury Asset Management.
Commenting on the launch, Marks said: “We believe this is a particularly favourable time to invest in corporate hybrid bonds, because the risk premiums are, on average, over 100bps 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.”
Peter Ball, global head of distribution at NAM, added: “In hybrid bonds, we see some of the best investment opportunities in the entire bond market. Only a few market participants can take advantage of them because it requires a high level of specialised expertise and experience.”
