Our Approach
Investment Philosophy
We exploit credit opportunities across sectors and market cycles, aiming to capture investing in strong companies using specialist skills to exploit opportunities across the full range of the capital structure. At the heart of our investment philosophy is the fact that investment grade companies rarely default, so by extension their junior debt rarely defaults.

Investment Philosophy

While many investors seeking high income will find it in the bonds of more risky companies or more risky countries, we invest in safe companies and will invest lower down the capital structure to obtain the higher yield.

By participating in junior or subordinated issues of quality companies, we can obtain the higher returns on offer, for the same default risk.

This strategy allows the investment management team to capitalise on their specialist skills. The team focuses on credits with the best risk/reward profile across sectors and market cycles, without the constraint of a benchmark. Specifically, the team has the required experience and expertise in the financial sector and niche areas, such as undated, floating rate and fixed-to-floater debt instruments, to access overlooked and often undervalued issues in the market. This enables them to obtain the higher yields often attached to junior or subordinated issues, or those with more complex features, as well as capturing the capital appreciation as the bonds realise their true value.

Many investors are not prepared to spend the time, or simply lack the skills required to evaluate them accurately, thus providing a steady source of inefficiencies and excellent opportunities for potentially strong risk-adjusted returns.

Investment Principles  

Building on these beliefs, for more than 25 years’ the fund managers have been developing extensive expertise analysing the corporate quality and capital structure of investment grade issuers. The resulting highly diversified, conviction-based strategy has produced strong, long-term performance with attractive yield and low default rates (no defaults in the Star fund since its inception in 2011).

Investing in higher yielding issues of investment grade issuers
Allows the managers to harvest yield from sub-investment grade issues, but to do so without the default risk associated with lower quality companies.

Focusing on income as well as price, instead of on price alone
Over the long term, incremental payments of coupons add up, contributing significantly to total returns – a much more reliable approach than depending on bond prices being favourable.

Using hybrids to calibrate interest rate exposures
Hybrids, such as long-dated and undated bonds, offer a range of fixed, floating and duration characteristics which can be used actively to position portfolio for market conditions at all stages of the market cycle.

Seeking the best opportunities, without regard for benchmarks
A conviction-driven approach targets efforts solely on the areas of ripest opportunity; for instance, in the financials sector, where regulations are enforcing structural quality improvements to support a deep, varied range of quality bank and non-bank issuers.

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Call us on +44 207 917 24 48 to speak with a member of the team; alternatively you can use the form below to send us an email. For details on how to find us please visit the Contact Us page.

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