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Ryan Hughes, Skandia Investment Group

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Skandia Investment Group hands GBP100m bond mandate to Du Pont Capital Management

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Skandia Investment Group (SIG) has appointed Ming Shao of Du Pont Capital Management (DCM) to run the GBP100m mandate for its Skandia High Yield Bond Fund.

The Skandia High Yield Bond Fund, while being a stand alone fund, is also used in SIG’s core funds – Skandia Diversified Fund, Skandia International Diversified Fund, Skandia International Growth Fund, Skandia Strategic Bond Fund, and the Skandia Spectrum range.

The Skandia High Yield Bond Fund aims to deliver total return through a combination of income and capital growth from a diversified portfolio predominantly composed of fixed and variable rate debt securities. To achieve this, the fund invests in both sterling and non-sterling denominated securities. Any non-sterling denominated securities will normally be hedged to minimise currency risk.

DCM is a subsidiary of US chemicals group Du Pont. DCM’s investment process is more opportunistic and less structured than many of its larger institutional competitors seeking out credits that are under pressure and is therefore rewarded with better risk premiums.  Ideas are generated from close monitoring of economic, industry and corporate events; pinpointing distress-associated opportunities at the company level. Once identified, DCM focuses on seeking out restructuring opportunities amongst these businesses to unlock value.

Portfolio Manager Ming Shao will be supported by senior credit analyst Murat Korkmaz on the mandate. Additionally, senior emerging market debt portfolio manager Yong Zhu will be on hand to offer interesting insights from a different perspective. The team builds its own financial models that focus on stress testing and looking for investments that can withstand the worst of market conditions, but offer significant upside opportunities with a margin of safety.

The appointment of Shao and his team sees DCM taking over the mandate from Rob Cook of JPMorgan. While Cook has performed well during his tenure, SIG has higher conviction in Shao and his team’s investment process.

Ryan Hughes (pictured), portfolio manager for Skandia Investment Group says: “Ming and his investment team are highly experienced and are extremely robust, having successfully worked through a number of market cycles. Their strategy is based on a disciplined, analytical approach employing a top-down sector allocation, and bottom-up security selection process, to identify and capture high yielding value opportunities. This disciplined investment process coupled with the team’s wealth of experience make DCM a welcome appointment to the Skandia High Yield Bond Fund. We’d like to thank Rob at JPMorgan for his valuable contribution to the Skandia High Yield Bond Fund.”

 

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