April 23, 2013
Greenwich, CT - Tradex Global Advisors announces the launch
of its Short-Biased High Yield Portfolio.
The Fund is expected to launch on June 1st. Tradex has engaged Michael Bartlett of Hedge
Advisors Limited to introduce and solicit clients for the Short-Biased High
Yield Portfolio and other Tradex Global products primarily in Europe.
The Tradex Global Short-Biased High Yield Portfolio is an actively managed short-biased credit fund that provides an asymmetric return profile. It is expected to capitalize on the current distorted credit market conditions. The high yield market is over $1+ trillion, with prices at historic highs and yields at historic lows; in-line with the 2006 credit market peak. The Fund will primarily be short longer-dated, unsecured/subordinated fixed rate bonds. Longs will be used to offset some of the negative carry, and will be focused on shorter-dated, secured, floating-rate bank debt and secured bonds. Tradex Global was an early participant in this strategy in 2007-2008 and was extraordinarily successful. The current indiscriminate demand for yield and the demise of prop desks and dealers, who previously lent support to the market, are two major differences between now and 2007-2008 when Tradex was last short high yield.
The Tradex Global Short-Biased High Yield Portfolio is an actively managed short-biased credit fund that provides an asymmetric return profile. It is expected to capitalize on the current distorted credit market conditions. The high yield market is over $1+ trillion, with prices at historic highs and yields at historic lows; in-line with the 2006 credit market peak. The Fund will primarily be short longer-dated, unsecured/subordinated fixed rate bonds. Longs will be used to offset some of the negative carry, and will be focused on shorter-dated, secured, floating-rate bank debt and secured bonds. Tradex Global was an early participant in this strategy in 2007-2008 and was extraordinarily successful. The current indiscriminate demand for yield and the demise of prop desks and dealers, who previously lent support to the market, are two major differences between now and 2007-2008 when Tradex was last short high yield.
Tradex Global Advisors has had a relationship with Michael Bartlett of Hedge Advisors for many years. Bartlett said, "We are very excited about the opportunity to work with Tradex after all these years. Our goal has always been to introduce institutional and high net worth investors to high quality, relevant hedge fund products. With the high yield market where it is today, and Tradex's track record of success in the space, we felt it was a perfect time to formalize an agreement to represent the firm and The Short-Biased High Yield Portfolio."
Michael Beattie, Chief Investment Officer of Tradex Global Advisors, said, "The government has forced investors into risky high yield credits due to artificially low interest rates. The investors are not being compensated for the risk they are taking, and this will not end well. Many lower-quality high yield companies have had access to cheap money and have issued a tremendous amount of debt, but are extremely vulnerable to cyclical, secular or idiosyncratic negative events. In many cases, a slight change in forward guidance could make honoring interest payments difficult. We are focusing on 150 of the bottom-tier issuers and will be heavily short those companies. This is not a macro call, and Tradex is focusing on vulnerable bonds that can lose between 30 and 100 points, with some companies’ high yield bonds seeing zero recovery.”
Offering Materials for US and non-US clients are available. Interested European clients should contact Michael Bartlett at mbartlett@hedgeadvisors.net or +44 (0) 208-426-1300. Clients outside of Europe should contact Richard Travia at richard@thetradexgroup.com or 203-863-1537. The team is available to have conference calls and meetings to discuss in detail the Fund ahead of the June 1st launch.
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