Specialist fixed interest manager Omega Global Investors will launch its new High Investment Credit Opportunities Fund next month, after it has been successful in securing seed money.
The fund will initially be launched for institutional investors, but Omega is keen to launch a retail version of the fund over time.
"It is going to be depended on demand," Omega director of investments Mathew McCrum told InvestorDaily.
The fund will invest in high investment grade credit and will hold between 125 to 150 securities.
McCrum said there are good opportunities in global credit, because the pricing of many corporate bonds assume a level of default that is unlikely to occur.
"Credit spreads have rallied quite a bit, but they still have a long way to go to reflect the real risk in credit," McCrum said. "The actual default risk is quite low."
Corporations have restructured their balance sheets through capital raisings, which has reduced the risk of default.
"There are opportunities in credit, but it needs to be highly diversified and exposed to companies that have a high chance of repaying their debt."
The global financial crisis has sparked reviews of fixed interest portfolios and Omega has seen an increase in inflows, McCrum said.
"A lot of people found that when the global financial crisis hit they had a lot of unexpected risk in their fixed interest portfolios; it didn't behave the way they were expecting," McCrum said.
"As people have rethought defensive investing, we've picked up some mandates."
Omega has currently about $180 million in funds under management across its global credit, global government bonds and core Australian bonds funds.
The firm is on the look out for a third investment manager and is also scouting for an operational manager to deal with the recent growth of the company.
