Stenham Asset Management’s latest fund of debt funds has returned 3.4 percent since its launch in January, the firm has revealed.
Stenham Credit Opportunities is a $21 million fund of credit-focused hedge funds, and targets 8 – 12 percent annualised returns. It allocated across the full spectrum of credit strategies, including long / short credit funds, distressed debt and structured credit funds. It offers quarterly liquidity.
Tim Beck, senior research analyst and fund lead for Stenham Credit Opportunities, said in a statement: “We launched Stenham Credit Opportunities as a stand-alone credit-focused fund as we saw compelling opportunities in the market. Credit markets tend to be structurally inefficient with many investors prohibited from holding certain assets such as defaulted debt.
“The fund is focused on managers who can actively short and benefit from the asymmetry in credit; the fund will take more directional exposure in structured credit and selected distressed investments, including liquidations as well as opportunities from bank deleveraging.”
Critics have questioned whether the lower returns typically associated with debt funds (relative to private equity, for example) still allow for the fund of funds manager to deliver attractive returns in turn, net of fees.
In defence of the model, Beck counters: “Many investors are wary of investing in on-the-run credit and fixed income securities given current yields. We believe the greater breadth of investments offered through this product, coupled with funds actively shorting segments of the market offers a compelling investment alternative.”