Bailey McCann, Opalesque New York:
2013 was a good year for London-based LNG Capital according to their latest investor letter, obtained by Opalesque. The flagship fund LNG Europa Credit is up +16% for net returns in 2013, a slight decrease from the 19.5% net return posted in 2012, but still placing the fund among top performers in European credit funds. The fund is an actively managed European credit fund focused on European corporate debt.
Fund managers say that so far, they've seen the emergence of two main themes for 2014 - specifically a move out of US equities and into global developed market equities, and an expectation for moderate US growth for the year despite the shift. "The logic behind this reallocation is that analysis points to the US being fully valued as a result of very strong performance last year," the fund writes.
On Europe, managers note that persistent unemployment and European quantitative easing are still effecting financial markets and those ramifications will continue to work their way through the system this year. Given the level of unemployment, LNG sees no reason for European rates to rise. Going forward, LNG is constructive on European credit. "We think emerging-market dislocations will continue to affect global risk appetite and therefore we want to be selective about entry points, and we look to selectively take advantage of dislocations as opportunities arise."
Fund assets from institutional, accredited, and retail inves......................
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