media releases

Lombard Odier Investment Managers launches Fallen Angels Recovery strategy

11 gennaio 2022

Research-driven strategy taps into ‘Credit’s sweet spot’ to offer ‘through the cycle’ risk-adjusted returns for investors

Lombard Odier Investment Managers (“LOIM”) has expanded its fixed income franchise with the launch of Fallen Angels Recovery, a high conviction strategy that invests in companies that have fallen down the ratings spectrum, and yet display strong recovery prospects and an attractive valuation proposition.

The Fallen Angels Recovery strategy launched on 30 November 2021 and has assets under management of USD 86m (as at 31 December 2021).

Fallen angels are bond issuances that have been downgraded from Investment Grade to High Yield, but which are strongly undervalued relative to their rating peers. Using a high conviction and research-driven approach, the Fallen Angels Recovery strategy offers attractive ‘through the cycle’ risk-adjusted returns for investors and provides strong market exposure to a recovery, whilst limiting exposure to a sell-off.

The strategy builds upon LOIM’s market leading research into the fallen angel phenomenon, which has shown persistently superior returns over the last sixteen years. In fact, fallen angels have delivered the highest returns of all rating categories both from a total return and credit excess return perspective over that period.

The strategy’s investment approach combines alpha and beta management to mitigate risks and drawdowns, whilst exploiting bottom-up opportunities. Approximately 100 holdings, of which around 90% are BB rated, are selected based on fundamental analysis of the issuer, with sustainability embedded throughout the investment process.

Fallen Angels Recovery is overseen by Yannik Zufferey, CIO for Fixed Income and managed by Ashton Parker, Lead Portfolio Manager and Head of Credit Research. Yannik and Ashton are supported by a dedicated investment team comprised of Jerome Collet, Anando Maitra and Denise Yung.

Yannik Zufferey, CIO, Fixed Income at LOIM commented: “At LOIM we have a long-standing track record in delivering robust returns from crossover credit strategies, and we believe our Fallen Angels Recovery strategy represents a similarly compelling investment opportunity. An initial look at the historical performance of fallen angels versus other corporate credit segments is extremely promising, and our research shows persistently superior risk-adjusted returns for fallen angels over the last sixteen years.

“Our market leading investment team, which combines fundamental credit analysis, systematic capabilities and crossover experience, is committed to capture these opportunities and generate attractive returns for our clients.”

About Lombard Odier IM

At Lombard Odier Investment Managers, we are rethinkers with one goal in mind. To provide our clients with outstanding investment solutions that meet their needs for the long term and evolve to thrive in the challenging world in which we all live.

We are focused investment specialists, seeking out investment opportunities that lie on less trodden paths, where our diverse and talented team can add genuine, persistent, value to our clients. We constantly rethink what we know and do, innovating to create new strategies and develop new ways of investing.

We believe that the next economic revolution has already begun and that sustainability will be a major driver of returns for the foreseeable future and beyond. For those with the skills to adapt to this new reality, sustainability will create new sources of alpha, open up new investment opportunities and lead to enhanced return and reduced portfolio risk.

Our team of sustainability experts combine sophisticated data sources, academic rigour and technical innovation to create leading-edge, science-based tools that provide unique insights that are available to all our investment professionals.

These unique insights are reflected directly in our growing range of dedicated sustainable investment strategies that are aligned to this core belief - That our economic model must move from being Wasteful, Idle, Lopsided and Dirty to become Circular, Lean, Inclusive and Clean. We call this The CLIC™ Economy.

With more than 160 investment professionals, we are a global business with a network of 13 offices across Europe, Asia and North America and have assets under management of 70 billion CHF (as at 31 August 2021).

For more information: www.lombardodier.com

Contact

Celeste Herriger

Head of PR, Lombard Odier Investment Managers

Tel.: +44 20 3206 6167

c.herriger@lombardodier.com

Informazioni importanti.

This document has been issued by Lombard Odier Funds (Europe) S.A. a Luxembourg based public limited company (SA), having its registered office at 291, route d’Arlon, 1150 Luxembourg, authorised and regulated by the CSSF as a Management Company within the meaning of EU Directive 2009/65/EC, as amended; and within the meaning of the EU Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD). The purpose of the Management Company is the creation, promotion, administration, management and the marketing of Luxembourg and foreign UCITS, alternative investment funds ("AIFs") and other regulated funds, collective investment vehicles or other investment vehicles, as well as the offering of portfolio management and investment advisory services.
Lombard Odier Investment Managers (“LOIM”) is a trade name.

This document is provided for information purposes only and does not constitute an offer or a recommendation to purchase or sell any security or service. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful. This material does not contain personalized recommendations or advice and is not intended to substitute any professional advice on investment in financial products. Before entering into any transaction, an investor should consider carefully the suitability of a transaction to his/her particular circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. This document is the property of LOIM and is addressed to its recipient exclusively for their personal use. It may not be reproduced (in whole or in part), transmitted, modified, or used for any other purpose without the prior written permission of LOIM. This material contains the opinions of LOIM, as at the date of issue.

Neither this document nor any copy thereof may be sent, taken into, or distributed in the United States of America, any of its territories or possessions or areas subject to its jurisdiction, or to or for the benefit of a United States Person. For this purpose, the term "United States Person" shall mean any citizen, national or resident of the United States of America, partnership organized or existing in any state, territory or possession of the United States of America, a corporation organized under the laws of the United States or of any state, territory or possession thereof, or any estate or trust that is subject to United States Federal income tax regardless of the source of its income.

Source of the figures: Unless otherwise stated, figures are prepared by LOIM.

Although certain information has been obtained from public sources believed to be reliable, without independent verification, we cannot guarantee its accuracy or the completeness of all information available from public sources.
Views and opinions expressed are for informational purposes only and do not constitute a recommendation by LOIM to buy, sell or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change. They should not be construed as investment advice.

No part of this material may be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorised agent of the recipient, without Lombard Odier Funds (Europe) S.A prior consent.