Oak Hill Platinum Partners, the U.S. investment firm run by billionaire Robert Bass and his team, is planning to increase the risk profile for its Oak Hill Contingent Capital Fund, according to an investor document. The fund has a volatility target of 7%, but in previous years it has not hit the target due to diversification across strategies, the document said. This year, Oak Hill expects to come close to the target through increasing credit and equity exposures.
The firm expects fixed-income strategies to continue to dominate the portfolio this year. Core investments will continue to be interest-rate swap-yield butterflies, interest-rate swap spreads, mortgage-backed securities, and--to a lesser extent--interest-rate volatility and basis strategies. "We will selectively add credit risk and potentially increase certain of the equity strategies as opportunities present themselves. We expect the average allocation of our maximum risk budget to be in the range of 65% to 75%, the highest average annual risk index since inception." Calls to Peter Bouyoucos, principal, were not returned by press time.
