Legg Mason Global Asset Management has launched Permal Hedge Strategies Fund a fixed income focused multi-manager, multi-strategy fund of hedge funds.
The fund invests in a broad range of fixed-income strategies. Investments include developed as well as emerging market fixed income and long/short fixed income.
"Outside of corporate credit, we like non-agency RMBS, with many securities offering significantly higher cash yields than corporate bonds," said Javier Dyer, portfolio manager of Permal Hedge Strategies Fund and Permal Group deputy CIO.
There are also smaller allocations to event-driven strategies, such as risk arbitrage, distressed debt, special situations and activists, as well as global macro strategies, including both systematic and discretionary managers, which are intended to mitigate market volatility.
"With corporate activity likely to increase throughout 2012, we believe that this is a good area to be in," Dyer said. "We expect to see corporate restructurings, both inside and outside of bankruptcy, and distressed credit opportunities. Currently there are late-stage bankruptcy situations that are offering attractive IRRs for what are effectively liquidation situations."
He added that elsewhere, with many loan and bond refinancings still due for renewal in 2013 and 2014, the firm is once again expecting multiple long, short and distressed opportunities, with capital markets asserting greater discipline in differentiating between the good and bad credits.
The Fund is managed by Legg Mason Partners and sub-advised by Permal Asset Management, a member of Permal Group, the $20 billion alternative investment manager.