Investment returns in 2017
The overall investment performance of Accunia’s various mandates was positive in 2017, cf. the table below. Credit as an asset class performed well throughout the year with tightened credit spreads; this was supported by the global economic upswing, very low volatility, ample liquidity and interest rates staying at low levels.
Although we expect to see more volatile markets in 2018, we are constructive on the outlook. We stay focused on reducing risk in certain sub-Investment Grade asset classes within the credit space, where we view the current levels as overvalued.
View: Investing in CLOs
Recent press coverage in Danish media compares the risk of Collateralised Loan Obligations (CLOs) based on leveraged loans with Collateral Debt Obligations (CDOs) based on subprime mortgage loans.
CLOs are even categorised as a less safe investment than subprime CDOs, an asset which experienced very large realised losses during the crisis. In our view, this is a misconception. Subprime mortgage CDOs experienced realised losses accumulated over 5-years of more than 90% in the more junior tranches compared with just 2.4% and 0.9% in CLO “BB” tranches in Europe and US, according to data from Moody’s.
We do believe that CLOs are an interesting asset class with an attractive risk-return. As one of the largest investors in the Nordics in both leveraged loans and CLOs, we would like to give a deeper insight in the CLO structure – see the article below.
Accunia: Investing in CLOs 04-12-2017
Fund in focus by Capital Structure
Accunia bolsters presence in CLO market with new listed funds; weighs Single and Double B CLO relative value.
Please find enclosed article.
Accunia – CapitalStructure 26-10-2017
Accunia completes major CLO bond issue
Accunia Fondsmæglerselskab A/S recently completed its second CLO bond issue with a total commitment of €386MM (DKK 2.9 billion).
Investment was drawn from 20 institutional investors in Denmark, Finland and rest of Europe, and from Accunia’s base of clients and owners. These funds will primarily be invested in loans for selected creditworthy European companies.
”Over the past few years we have been building our own management organization for the credit market. We have attracted key talent, from London as well, to ensure we have the highly specialized knowledge and experience that is required to invest in corporate lending,” says Henrik Nordby Christensen, CEO of Accunia.
”We are very grateful to institutional investors for having the faith to invest through Accunia,” he adds.
A CLO (Collateralized Loan Obligations) is a bond issue based on a portfolio of loans. Deutsche Bank acted as sponsor for the Accunia new issue. Chief Portfolio Manager Sergio Grasso heads the firm’s CLO team.
“We are a fully specialized credit house delivering internationally competitive CLO issues. This makes us an attractive partner for institutional investors and providers, and enables us to attract and retain highly qualified professionals in all our fields of operation. This is a position that we are aiming to grow in the coming years,” says Henrik Nordby Christensen.
Accunia have learned that institutional investors value “boutique managers” that focus on skills in just one investment area. The experience is that not spreading their activities leads to better performance. They also prefer having the firm’s executives and portfolio managers act as co-investors as well as owning a significant share of the business.
Accunia Fondsmæglerselskab A/S was established in 2008 and from the outset focused on offering specialized credit management for semi-institutional investors and wealthy individuals, as Accunia is the sole provider in this market.
The investor base has since expanded to include major institutional investors. Accunia has 34 staff members in Denmark and Finland, managing DKK 5.9 billion in CLO issuance, with a total of DKK 12 billion under management. 04-10-2017
Accunia Lists Two Funds on Nasdaq Copenhagen with First Trading Day 20 September 2017
Accunia recently completed a successful listing of the two funds Accunia European CLO Investment Grade, and Accunia European CLO Opportunity. The total commitment is approximately DKK 550 mill. (EUR 74 mill.).
The funds primarily invest in senior secured corporate loans denominated in Euro via Collateralized Loan Obligations (CLOs), and are the first of their kind actively managed in Scandinavia.
The expected return is between 1.5% and 2.0% per annum on the CLO Investment Grade fund and between 6.0% and 7.0% on the CLO Opportunity fund – both net of fees. The funds are open-ended and will pay out a quarterly dividend. 25-09-2017