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La Francaise AM, the Paris-based asset manager, and S&P Capital IQ, a leading provider of multi-asset class research, data and analytics, have launched a global credit fund named LFP R2P Global Credit as part of a Luxembourg-domiciled SICAV (LFP S&P Capital IQ Fund), in the first phase of a partnership announced in June.
LFP R2P Global Credit’s investment universe is intentionally broad so as to capture all potential opportunities available on the bond market. As a global credit fund with significant exposure to the US corporate bond market, the portfolio will be comprised of at least 90% Investment Grade instruments and at most 10% High Yield instruments, with the objective of outperforming the Barclays Global Aggregate Corporate Hedged € Index (or $ index). Exchange rate risk is systematically hedged.
“In a climate where accurate credit market knowledge is crucial, La Française AM and S&P Capital IQ have signed an agreement that marries La Française AM’s extensive experience in fixed income management (5.4 billion €uros is Assets under Management – open funds) with S&P Capital IQ’s expertise in credit analysis,” says Patrick Rivière, Managing Director of La Francaise AM. “The launch of the LFP R2P Global Credit fund is the first milestone in a long-term and unique partnership with great potential.”
While portfolio construction and execution is ultimately the responsibility of La Française AM, both partners contribute to various stages of the investment process, such as macro-economic analysis, issuer scrutiny and qualitative analysis.
“In such demanding and changing financial markets, the key to success is in creativity, collaboration and innovation,” says Lou Eccleston, President of S&P Capital IQ. “This complementary partnership brings together two talented teams and establishes a platform for collaboration between leaders in their respective disciplines to create real value for the clients of La Française AM.”
As part of S&P Capital IQ’s role of non-discretionary advisor, the fund will make full use of the firm’s proprietary Risk-to-Price (R2P) analytical methodology, which scores bonds with a relative measure according to how well they compensate investors, through yield, for associated market and credit risks.
In conclusion, Michael Thompson, MD at S&P Capital IQ, says, “Our Risk-to-Price analytical methodology aims to stay ahead of the benchmark by scoring bonds on a relative basis that considers the individual risk versus reward profile of each debenture.”
This pure global investment grade credit fund is designed for investors seeking high performance alternative investment solutions during a time of general uncertainty.
