Hermes Multi Strategy Credit

A fund investing across the full spectrum of credit asset classes, structurally allocating to the best long ideas as well as defensive trades to protect the portfolio in a market downturn.

The fund focuses on security selection rather than issuer selection alone, looking through a company’s capital structure to compare bonds, loans, credit derivatives and other securities with peers on a cross-asset basis. Monthly strategy meetings between the Manager, Head of Credit Research and Analysts determine where opportunities are in the universe, focusing on the largest names to give the richest opportunity set across credit asset classes. There is a bias towards the higher yielding parts of the universe, where the team believe there is the most opportunity for mispricing.

The portfolio consists of a structural allocation of two-thirds to the best ideas and one-third defensive trades which consists of sizeable positions intended to provide protection if credit markets go down, without detracting during up trending markets.

We like the fund due to its unique strategy which has shown a strong ability to participate in up bond markets, whilst participating minimally on the downside. The team behind the fund is very experienced and has a long history of working together.

Fund type Offshore FCA
Asset class Bonds
Sector Flexible Bonds
Managed by Fraser Lundie
Held in EQ PortfoliosAbsolute Return

Manager Profile

Fraser joined Hermes in February 2010 and is Co-Head of Credit and lead manager on the Hermes range of credit strategies. Prior to this he was at Fortis Investments, where he was responsible for European high yield credit. Fraser graduated from the University of Aberdeen with an MA (Hons) in Economics; he earned an MSc in Investment Analysis from the University of Stirling and is a CFA charterholder. In 2017, Fraser joined the board of CFA UK, a member society of the CFA Institute. Having previously featured in Financial News’s ‘40 Under 40 Rising Stars of Asset Management’, an editorial selection of the brightest up-and-coming men and women in the industry, in 2015 Fraser was named as one of the top 10 star fund managers of tomorrow by the Daily Telegraph.

Fund performance

Hermes Investment Management

Hermes Investment Management is a boutique asset manager, and was originally founded in 1983 to manage the assets of the BT Pension Scheme. In March 2018, US-based Federated Investors purchased a 60% controlling stake for just under £250m, in a move that will expand distribution channels further but will not affect product management or any of Hermes’ staff directly.