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Manager To Offer Global High-Yield Capability

MacKay Shields, an asset manager with $36 billion under management, plans to offer a global high-yield product that will combine investments in U.S. and European credits, said Ravi Akhoury, chairman and ceo of MacKay Shields.

MacKay Shields, an asset manager with $36 billion under management, plans to offer a global high-yield product that will combine investments in U.S. and European credits, said Ravi Akhoury, chairman and ceo of MacKay Shields. The firm currently only invests in U.S. high-yield names and Akhoury noted it was approaching its capacity in the high-yield asset class with more than $15 billion under management. As a result, it recently acquired the high-yield team from Pareto Partners, which gives the combined entity a little room to expand.

"It's rare to have combined U.S. and European investments; it's a very powerful product and something not too many money managers have," he stated. He said it is difficult to determine how large the global fund will be, since Pareto Partners has agreed to help transition the accounts but ultimately the account holders will decide if they want to be managed by MacKay Shields, said Akhoury. He estimated that Pareto Partners currently had $1 billion in its global high-yield fund and $1 billion in its U.S. high-yield fund.

"The global fund's mix will vary on the basis of a range which will be used opportunistically, but will certainly be majority U.S. because the U.S. market dwarfs other high-yield markets," Akhoury said. He added opportunity abounds in the European market, as it is as nascent as the U.S. market was about eight years ago. "The whole concept of high-yield is relatively newer [in Europe]; the market is not as developed, large and liquid," he stated, explaining that the European market is less efficient and therefore presents more opportunities.

Dan Roberts, senior managing director at Pareto Partners, and Michael Kimble, Taylor Wagenseil and Louis Cohen, all directors at Pareto Partners, will join MacKay Shields in the same positions. They will report to Don Morgan, senior managing director and head of MacKay Shields' high-yield team.

 

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