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| Anthony Robertson |
BlueBay Asset Management in London is looking for pockets of volatility from now through the end of summer to put money to work in high-yield bonds. It could buy up to €65 million worth in the coming months. "We lowered our cash position from 20% to 10% in the past month as certain valuations improved dramatically. This cash balance could quite possibly fall to 5% by the end of the summer," said Anthony Robertson, senior portfolio manager and co-head of high-yield at BlueBay. The firm runs €1.3 billion in high yield, benchmarked against the Merrill Lynch European High Yield Constrained Index.
The manager said he will add to existing holdings as well as to new positions, but declined to mention specific names. "There are a lot of names with interesting fundamentals where the valuations are wrong and prices can change quickly," he noted, pointing to Cablecom as a name that was attractive at par three weeks ago but which has since gone to 110. As a rule, Robinson said, he is constructive on the market at current levels but expects volatility in the near term. As a result, he is adopting a modestly defensive position. This translates into investing in seasoned issuers with strong organic free cash flows, significant equity cushions and transparent financing profiles.
BlueBay does not invest on a sector basis or target high-beta or low-beta exposure. That said, the high-yield portfolio is 10% underweight capital goods with lighter underweights in consumer cyclicals and telcommunications, and 10% overweight media with more modest overweights in services and non-cyclicals. While Robinson would avoid autos and auto parts companies in general, he still holds Texid because it trades at a significant discount to its peers. Among Bluebay's largest holdings are U.K. food company RHM and Polish broadcasting company TVN Finance.
