Schroders to launch its first liquid distressed fund, Schroder GAIA II NGA Turnaround

LONDON, 10-Mar-2016 — /EuropaWire/ — Schroders is pleased to announce the launch of Schroder GAIA[1] II NGA Turnaround, Schroders’ first liquid distressed fund and the first fund to launch on the GAIA II platform. The fund will be externally managed by New Generation Advisors (NGA), which has a 26 year track record investing in distressed securities. The fund will offer clients a liquid alternative strategy that is uncorrelated to traditional equity and bond markets to provide portfolio diversification.

The fund takes fundamentally-driven long and short positions in corporate credit and equity securities, mainly in North America. It aims to capitalise on inefficiencies that exist in the distressed securities market due to lack of understanding of the bankruptcy process and maximise returns from bankruptcies, distressed companies and turnaround situations. The fund is well diversified across sector, capital structure and issuer, and focuses on the liquid end of the distressed market. This diversification and focus on liquidity allows the fund to offer attractive liquidity terms for investors.

The fund will be managed by George Putnam III, Founder of NGA and manager of NGA’s flagship strategy. Launched in 1990, the flagship strategy has more than $800 million of assets under management and has delivered an annualised net return of 11.1%[2]. Schroder GAIA II NGA Turnaround is benchmark unconstrained and will target an annualised return of 8-12% net of fees with expected volatility of 10-12%.

Eric Bertrand, Director of GAIA platform, said:

“We continue to see very strong demand for liquid alternative investment strategies, run by experienced managers with a proven track record over many cycles.

We’re delighted to launch the first fund on the GAIA II platform with such a high-quality hedge fund managerwho has one of the longest, most successful track records in the industry. This is an opportune time to be launching a distressed investment strategy to further widen the range of strategies across both GAIA platforms. NGA has a 26-year track record investing in distressed securities, led by George Putnam III, who has an incredibly strong reputation for being a pioneer and veteran in the liquid distressed space having focused on bankruptcy, distressed companies and turnaround situations for more than three decades, as a lawyer, a commentator and an investor.”

George Putnam III, Founder of NGA, said: 

“With a record level of low quality debt outstanding, we expect the supply of distressed bonds to increase in the coming quarters. However, even if the next big wave of defaults is slow to arrive, distressed opportunities always exist because, even in the best of times, some businesses manage to make mistakes, and we are well positioned to take advantage of these opportunities.”

GAIA

Both the GAIA and GAIA II platforms combine the strength of Schroders’ renowned asset management expertise and extensive distribution capability with leading hedge fund managers.

GAIA II platform is a liquid alternatives platform for externally managed strategies. GAIA II will sit alongside the existing GAIA[3] platform to provide clients access to a more diverse hedge fund offering within a regulated framework (AIFMD[4]). The platform allows the flexibility to offer clients the opportunity to invest in some of the world’s most attractive alternatives strategies.

Schroders now has seven funds on the GAIA platform, six managed by external hedge fund managers (Schroder GAIA Egerton Equity, Schroder GAIA Sirios US Equity, Schroder GAIA KKR Credit, Schroder GAIA Paulson Merger Arbitrage, Schroder GAIA BSP Credit and Schroder GAIA BlueTrend) and one managed internally (Schroder GAIA Cat Bond). Schroder GAIA II NGA Turnaround is the first fund to be launched on the GAIA II platform.

For further information, please contact:

Lucy Cotter                                         Tel: +44 (0)20 7658 3365/ lucy.cotter@schroders.com

Sarah Deutscher                                 Tel: +44 (0)20 7658 6139/  sarah.deutscher@schroders.com

Notes to Editors

For trade press only.  To view the latest press releases from Schroders visit: http://ir.schroders.com/media

Schroders plc

Schroders is a global asset management company with £313.5 billion (€425.4 billion/US$462.1 billion) under management as at 31 December 2015. Our clients are major financial institutions including pension funds, banks and insurance companies, local and public authorities, governments, charities, high net worth individuals and retail investors.

With one of the largest networks of offices of any dedicated asset management company, we operate from 38 offices in 28 countries across Europe, the Americas, Asia, Middle East and Africa. Schroders has developed under stable ownership for over 200 years and long-term thinking governs our approach to investing, building client relationships and growing our business.

Further information about Schroders can be found at www.schroders.com.

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