Man GLG has launched a high-yield Ucits fund for recent hire, Mike Scott, as he looks forward to a “solidly positive” year for his asset class, especially in Europe.
The Man GLG High Yield Opportunities fund is a global unconstrained high-yield fund that combines bottom-up fundamental credit selection with top-down thematic analysis and has already been handed a ‘buy’ rating from Chelsea Financial Services.
HY spreads set to widen in 2019
He foresees a positive year, though he expects spreads to widen somewhat, “albeit in a contained way given the still mild default rate outlook”.
Scott added: “That said, I believe the yield is attractive and, following a period of marked underperformance of Europe versus the US last year, has created a very interesting entry point for specific high yield credits.
“Nonetheless, it is vital to be focused on credit selection and we expect to see more disparity emerge between good and bad credits.”
Scott joined Man GLG from Schroders in late 2018, and says he will retain a similar regional and sector-agnostic approach to selecting securities to build the 60-80 name portfolio, running both long and short positions.
Fund ratings
Chelsea and FundCalibre managing director Darius McDermott said it was a good hire for Man GLG, having removed the FundCalibre Elite rating from the Schroder fund upon his departure and moved the buy to a hold on the Chelsea Selection list.
He added: “He has an exceptional track record. I expect he will have different resources available to him at GLG, versus Schroders, but he is a very good manager.”
At Schroders, Scott ran the High Yield Opportunities fund, which has since been handed to Patrick Vogel, Schroders’ head of European credit and Daniel Pearson, fixed income fund manager.
A Schroders spokesman said its “strong, team-based approach and a robust investment process” should ensure continuity in the running of its fixed income portfolios.
Man GLG looks to expand credit platform
Man GLG said at launch, the new fund will focus particularly on “cash-generative and less cyclical businesses, which have reached attractive valuations”.
The group has wider ambitions for its credit platform, at what Scott describes as an “exciting time for the business”.
Teun Johnston, chief executive of Man GLG, added: “Mike is a talented portfolio manager whose process and investment philosophy have stood the test of time. We are pleased to be able to launch a fund with him as we seek to further develop our credit platform and enhance our suite of fixed income portfolios.”
