Fair Oaks Capital Launches Global CLO UCITS Fund

14 September 2016

Fair Oaks Capital has launched a new UCITS-compliant global collateralized loan obligation fund in conjunction with the Alpha UCITS platform.

The new fund, named the Fair Oaks Dynamic Credit Fund and launched on September 13, is the first UCITS vehicle to offer global exposure to senior secured corporate loans through investments in rated CLO securities, the company said in a statement.

The fund targets 5% per annum annual returns and will be actively managed with an emphasis on bottom-up fundamental credit analysis. Positions will reportedly concentrate on long-only exposure to investment-grade CLOs with no leverage at the fund level.

Other characteristics of the fund include daily NAVs, weekly liquidity and share denominations in dollar, pound, Swiss Franc and euro. It is domiciled in Luxembourg as part of Alpha UCITS’s SICAV. Alpha was founded in 2009 by former Brevan Howard executive Stephane Diederich, making it one of the oldest absolute return UCITS distribution and structuring platforms.

“We are delighted to launch the first UCITS fund focusing on the global CLO market,” said Miguel Ramos, partner of Fair Oaks, in a statement “We believe the Fair Oaks Dynamic Credit UCITS Fund will offer attractive portfolio benefits to any fixed income investor.”

“The strategy offers a good spread pick-up and diversification to corporate bonds and other credit assets,” he added. “It is well suited for this stage of the credit cycle.”

Based in London, Fair Oaks was founded in 2014 by Ramos, his former colleague at GSO Capital Partners/Blackstone Roger Coyle, and former Stone Tower Capital founders Anthony Edson and William Sheoris. The firm has invested close to $1 billion in the CLO asset class over the past two years.