Alma MidOcean Absolute Return Credit

The Alma MidOcean Absolute Return Credit fund targets income and relative value mispricing opportunities primarily within short-dated, liquid corporate credit of US companies, with a strong focus on callable securities. The portfolio comprises two core investment sub-strategies that are complemented by a tactical hedging overlay to construct a diversified, low duration profile. About 2/3rd of the portfolio risk is allocated to the ‘low volatility income’ strategy which targets income-oriented trades (high carry, low duration, and significant credit risk retention) and is directional in nature. In this regard, the team utilises fundamental analysis to seek alpha opportunities primarily in the High Yield callable bond market, with a focus on short date BB- credit (or B+ if valuations are more compelling). The remainder of the portfolio encompasses ‘relative value’ trades (positive carry, low net duration, modest credit risk retention) such as capital structure arbitrage opportunities and intra-industry pairs. This book is more opportunistic and particularly active at times when prices dislocate from fundamentals. Finally, the manager runs a tactical hedging overlay to mitigate residual risks, focusing primarily on credit spread risk and interest rate risk.