Event-driven strategies behind new liquid-alt fund help investors seeking uncorrelated returns, income, and capital gains
Picton Mahoney Asset Management has launched a new liquid alternative credit fund that aims to help Canadians struggling to generate income and capital gains in today’s low interest-rate environment using long-only fixed-income approaches.
Incorporating the firm’s Fortified Investing approach, the Picton Mahoney Fortified Special Situations Alternative Fund is offered through Class A, Class F, and Class I units of mutual funds – which were all launched on July 13 – as well as ETF units listed as PFSS on the TSX.
“We have been actively managing our Authentic Hedge® special situations strategy for over six years and have been pleased with its past success in providing investors with income and capital gains with better downside risk mitigation,” said Picton Mahoney President, CEO, and portfolio manager David Picton. “Our new alternative income fund offering provides an opportunity for a broader segment of investors to benefit from our proven experience and results.”
The firm’s special situations fund incorporates its proprietary Fortified Investing approach, a rules-based technique that emphasizes risk management through downside exposure mitigation and aims to build long-term growth independent of market conditions.
The fund aims to maximize total return – both through income and capital appreciation – primarily through investment in event-driven special situations in global fixed income, while using shorting and other hedging strategies to mitigate capital losses.
“There are multiple drivers of opportunities that can be deemed 'special situations' such as news of a merger and acquisition, a potential early bond refinancing, or a regulatory change,” said Philip Mesman, partner and head of Fixed Income at Picton Mahoney. “Our team of experienced credit analysts aim to create alpha in the portfolio through bottom-up analysis of a special situation by forensically examining the financials of a company and its bond covenants.”
In line with the firm’s stated mission to help investors achieve their financial goals with greater certainty, Mesman said the strategy hedges out currency, interest rate, credit, and liquidity risks.
