Lyxor Asset Management has teamed up with Marathon Asset Management to launch the Lyxor/Marathon Emerging Markets Bond Fund, a long-only Emerging Market (EM) debt strategy mainly focused on EM sovereign, quasi sovereign, and corporate bonds denominated in USD.
The fund uses an actively managed approach to portfolio construction. It provides an opportunity to capture the Beta of the asset class (as defined by the JP Morgan EMBI Global Diversified index), while seeking to generate Alpha through a keen focus on credit selection.
Founded in 1998 and managing USD15.5 billion of assets, Marathon is a US-based Global Credit Manager with teams dedicated to emerging markets, global corporate credit, structured credit, real estate and asset-backed lending. EM has been a core focus at Marathon since inception of the firm whose expertise spans various EM cycles. The fund strategy leverages on Marathon’s core competency of deep-dive fundamental credit analysis paired with an extensive understanding of EM credit dynamics.
As emerging countries mended their public finances after a string of financial crises in the late 1990s, the EM debt asset class is rapidly growing and becoming mainstream. It represents now more than 25 per cent of the fixed income market place. The EM external debt stock is larger than the USHigh Yield market, exceeding the USD3 trillion milestone in early 2018. It is also increasingly diversified over issuers, maturities, credit ratings. This growth is supported by an improvement in fundamentals for most issuers, many of which now compare favourably to mid-size developed economies. In the context of persistently low yields and muted growth in mature economies, EM debt provides a diversified and uncorrelated return to more traditional fixed income investments.
Nicolas Moussavi (pictured), Head of Mutual Fund Selection at Lyxor Asset Management, says: “With a 20-year track-record of selecting the best external managers for our clients, it has always been Lyxor’s hallmark to bring investors cutting-edge strategies that they wouldn’t otherwise have access to, in a liquid and transparent format.”
Gabriel Szpigiel, Partner and Head of Emerging Markets at Marathon Asset Management, says: “Launching of the strategy with Lyxor illustrates Marathon’s long-term commitment to EM. The long only benchmarked strategy leverages Marathon’s credit expertise, trading acumen, franchise, and index knowledge, in order to seek to generate Alpha for our investors. The exciting new partnership with Lyxor will allow Marathon to provide access to our unique investment approach to an expanded universe of clients.”
The Fund, with daily liquidity, is now passported into five countries (UK, Italy, France, Spain, Germany) and is available for a minimum subscription of EUR 100K (Class I) and EUR 10K (class A). Not all share classes are available or registered for sale in all jurisdictions.
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