Muzinich Long Short Credit Yield

Muzinich Long Short Credit is a long-biased corporate credit strategy that seeks to take advantage of both long and short opportunities to generate consistent, high single digit absolute returns over a three-to five-year period. The fund targets a dynamic portfolio of investments, primarily in US high yield bonds, and is managed by Brian Lieberman who took the lead of the portfolio at the end of 2018. The fund capitalises on Muzinich’s 30 years investing in higher yielding credit, with the strategy dynamically integrating different sources of risk and opportunities (fundamental, technical and valuation) into an integrated four-pronged strategy portfolio. The four underlying trading books are: core long, short maturity, short, and credit arbitrage. In the core long book, the PM typically hold a concentrated book of US and European names that offer opportunities for capital appreciation; not carry. These are generally credits of high quality companies which tend to be resilient to economic cycles and have stronger balance sheets. The short maturity bucket is a portfolio of bonds with near term maturities, high carry and a clear path to repayment (source of beta risk). The fund’s short book seeks to generate alpha by shorting troubled credits while also aiming to reduce the overall portfolio beta. The negative carry of short positions is expensive to fund, and as such shorts are more time sensitive, with an average investment horizon of 3-6 months. In the credit arbitrage book the PM seeks to take advantage of relative mispricing (basis trades, carry neutral pair-trades). Finally, there is an overarching hedge book which is designed to limit tail risk, control factor/sector risk, and protect against broad market repricings and dislocations.