FCA-regulated Redhedge Asset Management announced it’s opening its Synergy Total Return Fund to outside investors. It will focus on Credit Relative Value strategies in European Credit using both a qualitative and quantitative investment process to identify relative value opportunities in European Credit markets.
Andrea Seminara, CEO & CIO of Redhedge, said in a statement: “Fundamentally, we think that the investment environment going forwards will be very different from what we have been accustomed to in the past decade, where we saw ample liquidity and loose central bank policies effectively fueling an equity and bond bull market.
“Now, with central banks having to fight high inflation amidst low or no growth, cracks within the financial markets are starting to appear, especially in certain sectors, such as financials or real estate, where there are funding stresses and asset-liability mismatches as well as geopolitical fragmentation. This could lead to a higher volatility and risk-premia environment, and we believe this will create opportunities that the Synergy fund is equipped to take advantage of.”
The fund aims to take advantage of medium to longer-term credit market dislocations and themes. Year to date, it’s returned 8.06% through the end of April 2023.
Voon Kiat Lai, senior portfolio manager, said in a statement: “We think there is a disconnect between the risks priced in — between risk assets, such as equities and credit, compared to the rates market and underlying macro fundamentals. We see potential for tail risks in the short to medium term, such as the US debt ceiling debacle, US regional bank failures, commercial real estate imbalances, recession risks or potential upside inflation shocks, all of which have the potential to introduce risk premium back into risk assets that are not currently priced in.
“We think investors are not being compensated to hold onto outright risk, and therefore, we think a relative value approach and cautious consideration of downside risks are essential in investor’s portfolio construction.”