Bangkok--Nov 7--Weber Shandwick
The Asian Debt Fund, Ltd (“TADF”) is launching a new High Yield Tranche on November 1. This new offering will enable investors to tap into the under-explored high yield market in Asia-Pacific ex-Japan.
The High Yield Tranche will focus on the bank loan market, which comprises nearly half of all high yield debt opportunities in Asia. Traditional high yield funds tend to focus on the bond market and avoid the bank loan markets where settling trades can take time and be complicated.
This new tranche is issued under the umbrella of TADF which was first launched in January 2004 with a mandate to invest in distressed debt in Asia ex-Japan. TADF has become one of Asia's top performing hedge funds returning 26.2% net of fees for 2004. The Fund was named Best local (Singapore) Hedge Fund and Best Asian Distressed Fund at the second annual Asian Masters of Hedge Fund Awards in May 2005. Currently, the fund stands at USD 178 million (as at August 31, 2005) and has a capacity of up to USD 250 million.
Mr. Moe Ibrahim, the Fund Manager of TADF is confident in the prospects for the new tranche. “Relationships are keys to participating in the bank loan market. The relationships we have developed from the distressed debt fund will be keys to sourcing both sellers and buyers of bank loans. Our edge over traditional high yield players is that we understand how to source, analyze and settle bank loans; this is a normal part of our business,”
On his approach to investment for the new tranche, Mr. Ibrahim says “A disciplined credit selection approach will be implemented to limit volatility and construct a portfolio that consistently generates high risk-adjusted returns. The fund will take both long and short positions and risk will be managed by hedging through other investments such as treasuries, equities, and credit default swaps. Asset allocation will be diversified, with no more than 10% exposure to any individual credit, 33% to any individual country, and 25% to any individual industry. The fund will be looking to use leverage of up to 200%. Merrill Lynch has been appointed prime broker to the Fund.”
And on the fund’s strategy, he adds “Our strategy is dynamic. We will pay close attention to the existing universe of Issuers as well as new issues coming to market. The Asian high yield bank debt market has been growing rapidly with a number of newer companies tapping it as a source for growth capital. In addition, there are companies emerging from debt restructurings which still suffer from the taint of bankruptcy and need to raise capital via the high yield markets in order to reestablish credibility."
While most distressed funds hold high yield investments in a combined portfolio, TADF will manage high yield investments in a separate share class to provide investors with enhanced transparency and flexibility. The Fund is expected to generate attractive returns through high coupon payments as well as capital appreciation as there are few participants in the inefficient bank loan asset class.
The High Yield Tranche of The Asian Debt Fund, Ltd. will be open for subscription on November 1.
The Asian Debt Fund is managed by ADF Management. ADF Management, Ltd. (“ADFM”) was established in December 2003 as a joint venture between Finansa Pcl (“Finansa”), a publicly listed financial services group based in Thailand, and Japan Asia Investment Co (“JAIC”), a publicly listed venture capital firm in Japan. Moe Ibrahim is the Fund Manager and the founder of Finansa Singapore Pte Ltd (“FS”). FS is the sub-advisor of ADFM and employs the investment team of The Asian Debt Fund.
For further Information, please contact:
Nisittha Chaiyen
Associate
Weber Shandwick
Tel: 66 2 257 0300 Fax: 66 2 257 0312
[email protected]
www.webershandwick.com
Moe Ibrahim (65) 6438 4700 [email protected] End.