BlueBay Asset Management has closed a long-running emerging markets-focused convertible bond fund after assets in the strategy dropped to below $10 million, Citywire Selector has learned.
The BlueBay Emerging Market Convertible Bond fund was launched in October 2012 as a Luxembourg-domiciled vehicle. It was co-managed by Citywire + Mike Reed and portfolio manager Pierre-Henri De Monts De Savasse.
BlueBay Asset Management reviewed the developing world strategy and its fund board decided that the $10 million in assets was no longer viable despite recent strong performance.
It added that low levels of new paper in the EM converts market also influenced the decision to formally liquidate the fund, which took place on February 3.
In a statement to Citywire Selector, a spokesperson for BlueBay AM said: ‘While the fund continued to perform well since inception, the level of new issuance in the sector has been disappointing and therefore the universe has not developed as expected.
‘BlueBay has been investing in convertible bonds since 2008. With nearly $2.8 billion invested in the asset class, we believe the changing investment market dynamics will provide a favourable platform to generate strong risk adjusted returns in the asset class going forward.’
Former team member on the fund Alessandro Esposito, who was a portfolio manager at the time of the launch of the fund under Reed, left the firm in 2014 to join specialist boutique Theorema Funds.
This fund closure comes in the wake of more recent developments at the UK group.
Notably, BlueBay AM rejigged the line-up on several investment grade bond funds, which included veterans Raphael Robelin and Geraud Charpin stepping down from the €2.7 billion BlueBay Investment Grade Absolute Return Bond fund.
Elsewhere, it sought to strengthen both its personnel and product range with the launch of the BlueBay Global High Yield ESG Bond fund, as well as the hiring of emerging markets specialist Timothy Ash.
On a three-year total return basis to the end of January 2017, the BlueBay Em Mkt Convertible Bond fund lost 3.78% in US dollar terms. This compares to a 13.3% rise by its Citywire-assigned benchmark, the Thomson Reuters Asia ex Japan Convertible USD, over the same timeframe.