NB launches first global high-yield fund for Flynn

Added 8th August 2016

Neuberger Berman is to access the US, Europe and emerging markets with a Dublin-domiciled Global High Yield Bond Fund, headed by Patrick Flynn.

NB launches first global high-yield fund for Flynn

Launched today with assets of $77m (£59m), the Ucits vehicle will target a yield of around 5.5%.

The asset manager’s $37.6bn high-yield franchise already incorporates European, US and short duration Ucits portfolios, as well as funds operating in emerging hard and local currency debt.

The new fund is billed as a “natural extension” of its capabilities in the asset class.

Flynn will run the fund in collaboration with US colleagues on his flagship $7.8bn High Yield Bond Fund, as well as local managers in Europe and Asia.

The portfolio is initially split 65% in the US, with 20% in Europe and 15% in emerging markets.

It has around 20% in commodities, though the focus is primarily on high-quality business, particularly those involved in ‘mid-stream’ operations, while there is a preference for so-called ‘fallen angels’ in metal and mining.

Flynn said: “The depth and breadth of the global high-yield universe has developed markedly in recent years, with investors attracted to its defensive characteristics and low correlation to other asset classes.

“In our view, global high-yield valuations are compensating investors for the default risk in the market. Excluding commodity sectors, credit quality across global high-yield markets remains solid, which should set the scene for gradual spread tightening.”

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