Cognis Rolls Out New European Credit Opportunities Hedge Fund

Monday, September 2, 2013

London based Cognis Capital has launched a new European Credit Opportunities Hedge Fund. The strategy will focus on non-investment grade corporate credit across the capital structure, targeting mispriced opportunities where returns are driven by attractive yields and capital appreciation through fundamental credit improvement and credit events.

Our strong view is that non-investment grade credit is an attractive class given the current yields offered in today’s low growth environment and that the structure and characteristics of the European credit markets will provide significant alpha opportunities in secondary high yield, stressed and distressed credit over the next few years.

The European credit markets are still relatively immature with limited players. The opportunity set is large and growing, accelerated by banking regulatory changes and the refinancing wall in European leverage markets. This is driving a structural shift in corporate funding away from the banks towards bonds and strong high yield issuance continues to add depth and diversity to the European credit markets. Add to this the complexities of the multi-jurisdictional European markets and diverse economic conditions of the constituent countries and the potential for misunderstood situations and mispriced securities is high.

We believe that these characteristics, set against a backdrop of continuing European economic stabilisation and a pick-up in M & A and IPO activity providing the catalyst for credit events, will provide numerous alpha generation opportunities.



Cognis Capital LLP is authorised and regulated by the UK Financial Conduct Authority and promotions are limited to persons who are of a kind to whom the Fund may lawfully be promoted by an authorised person by virtue of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes)(Exemptions) Order 2001 and Rule 4.12 of the FCA's Conduct of Business Sourcebook and is exempt from the scheme promotion restriction accordingly. This does not constitute an offer to participate in any investment. An investment in the Fund may only be made pursuant to the Fund's offering memorandum. No assurance can be given that the Fund's investment objectives will be achieved and the value of investments may fall as well as rise. Past performance is not indicative of future returns.

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