BlueBay Asset Management in London is opening a U.S. office and hiring marketers to target U.S. investors with its suite of fixed-income hedge funds and "long plus" bond strategies. The "long plus" funds--dollar denominated and local currency emerging market debt, high-yield and investment grade--are so named because they can short up to 25% of their portfolios and hold up to 25% of their assets in cash. The firm is registering with the Securities and Exchange Commission and setting up Delaware-domiciled feeders for its Luxembourg funds.
Andrew Campbell, who recently joined BlueBay as head of the Americas from JPMorgan, is going through three channels: consultants, pension funds, foundations and endowments; fund of funds; and private banks. He intends to hire one or two institutional marketers this year. BlueBay has a partnership with Citigroup Private Bank and Campbell is having conversations with other private banks.
Campbell doesn't have specific asset gathering goals but said the firm, which manages just under $5 billion, would like to grow to $10-15 billion. Its asset are 50% in hedge funds and 50% in long plus, but he wants to have 70% in long plus because the strategies are more scaleable. Campbell thinks consultants will be receptive to BlueBay's strategies because their clients are hungry for returns and the industry is moving away from narrow style boxes. "When you push people into that box they effectively become that box," he observed. The BlueBay Emerging Market Bond Fund returned 13.68% for the year ending Jan. 31, while the JPMorgan EMBI Global Diversified index was up 10.96%. The BlueBay High Yield Bond Fund beat the Merrill Lynch European Currency High Yield Constrained Index by 3.67% over the same period. Fees are 100 basis points.