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Simon Thorp : « In the Aperture Credit Opportunities fund, we use fundamental analysis as well as quantitative tools »

According to Simon Thorp, Fund Manager of the Aperture Investors SICAV - Credit Opportunities Fund (ACOF) [1], a more inflationary environment has a direct impact on the valuation of its long positions. In such a context, he aims to reduce the duration of our portfolio...

Article also available in : English EN | français FR

A few words about Aperture Investors to start

Launched in 2018, Aperture Investors [2] is a US-based asset management company with $4.3 billion in assets under management at the end of 2021. It is a Joint Venture created in partnership with the Generali Group, one of the world’s leading insurance and asset management companies. To date, the company offers 9 types of strategies investing in the equity markets but also in the bond and credit markets. It distinguishes itself from its competitors through its innovative performance-based fee model.

Can you explain your performance fee system?

The philosophy of Aperture Investors, for all its funds, is that the management company and its managers should be remunerated on their ability to generate alpha (outperformance against the benchmark). In the case of ACOF, the annual management fee varies from a minimum of 0.39% [3] when the Fund’s performance only reach the Benchmark (SOFR+2%) or lower to a maximum of 4.29% when the Fund outperforms the Benchmark by at least 13%. This motivates Aperture to be very selective in the recruitment of its managers, in their ability to generate alpha, and implies an alignment of interest between the investors and the asset management company.

Within your range, what is the philosophy of the ACOF strategy in the credit market?

In the Aperture Credit Opportunities fund, we use fundamental analysis as well as quantitative tools to identify what we believe to be idiosyncratic return opportunities in the global credit universe. The idea is to continuously seek out these mispriced opportunities (long and short) while taking advantage of periods of low volatility to hedge against the general market trend through active use of portfolio hedges [4] .

How do you approach the current context of rising inflation in your portfolio management?

A more inflationary environment has a direct impact on the valuation of our long positions. In such a context, we aim to reduce the duration of our portfolio, while protecting ourselves against interest rate risk, for example by using the derivatives market: futures, options or CDS (Credit Default Swaps).

How do you implement your long/short strategy? Do you use credit derivatives?

As I just mentioned, we may use CDS on the issuers we hold in our portfolio. Otherwise, in concrete terms, our long/short strategy focuses mainly on convex opportunities (long and short) that show minimal correlation with the direction of the credit market.

RF , April 2022

Article also available in : English EN | français FR

P.S.

Please refer to the Web Glossary on https://www.generali-investments.com. Before making any investment decision, investors must read the Key Investor Information Document (KIID) and the Prospectus. The KIIDs are available in French and the Prospectus is available in English (not in French), as well as the annual and semi-annual reports on the website www.generali-investments.com or upon request free of charge from the Management Company of the Fund, Generali Investments Luxembourg S.A., 4 Rue Jean Monnet, L-2180 Luxembourg, Grand Duchy of Luxembourg, e-mail address: GILfundInfo@generali- invest.com. Please note that the Management Company may decide to terminate the agreements made for the marketing of the Fund in your country. For a summary of your investor rights regarding an individual complaint or a collective action for litigation on a financial product at EU level and in your country, please refer to www.generali-investments.com. The summary is available in English or an authorized language of your country. All information and opinions represent the judgment of the author at the time of publication and do constitute any investment advice, nor legal, accounting or tax advice and are subject to change without notice. Source: Aperture, Generali Investments Luxembourg S.A., Generali Investments Partners S.p.A. Società di gestione del risparmio.

Footnotes

[1] This marketing communication is related to Aperture Investors SICAV, a Luxembourg UCITS-SICAV and its related Sub-Fund, Credit Opportunities Fund (the “Sub-Fund";), altogether referred as The Fund or ACOF, registered for distribution in France.

[2] Aperture Investors, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”) which wholly owns Aperture Investors UK, Ltd, the Investment Manager of the ACOF, altogether referred as “Aperture Investors” or “Aperture”.

[3] Actively managed Fund (Benchmark SOFR+2% Index only used for performance fee calculation). IYH Dis EUR (registered in France) - Entry fee: 5% - Exit fee: 1% - Ongoing Charges: 0.58% with a variable management fees from 0.39% to 4.29%. Costs by class vary. Past performance does not predict future returns.

[4] Investment bears risks. The Fund is not a guaranteed product. There is no guarantee that the investment objective will be reached or that investors will reach a return on capital. Main risks: Interest rate risk, Credit risk, Derivative risks, Equity risk, Liquidity risk, foreign exchange risk, emerging markets. More risks are referred in the Prospectus.

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