iM Global Partner and its Partner Polen Capital have launched the iMGP European High Yield Fund, designed to provide investors with a strategy that aims to deliver a yield advantage and a differentiated source of diversification during a time when global portfolio allocations are under review.
Sub-managed by Polen Capital, the fund seeks to provide a total return to investors consisting of a high current level of income, together with long-term capital appreciation, by investing in a diversified portfolio of European high yield bonds. At least 80 per cent of the fund will be invested in high yield debt securities, with at least two thirds of the assets being invested in securities rated below Baa3 and denominated in euros.
The fund will be managed by a team that was previously responsible for managing more than USD2 billion of European and Global High Yield assets for a well-established UK firm and has deep expertise in European high yield. Ben Pakenham, who was Head of European High Yield and Global Loans at a UK-based asset manager prior to joining Polen Capital, will serve as lead portfolio manager. The team also includes co-portfolio manager and research analyst Adam Tabor as well as research analysts Andrew Carrie and Julien Martin.
By carrying out fundamental research, the team seeks to identify mispriced securities with an embedded margin of safety to build concentrated, yield-advantaged portfolios. At the same time, they remain informed by the macro environment and implement strategic overlays to align their portfolio positioning with the broader economic backdrop.
The European high yield market has matured significantly over the past 20 years. Today, it stands at more than EUR400 billion, spread across 800 bonds from 400 unique issuers. At roughly one-third of the size of the US high yield market, European high yield offers active managers a broad and liquid opportunity set that warrants consideration as part of a global asset allocation.
Key features of the iMGP European High Yield Fund:
High conviction: A concentrated portfolio holding approximately 70-90 issuers.
Yield advantage: Aims for a yield premium of 75-100bps compared to the index.
Fundamental research: Relative exposures driven by value and conviction, seeking attractive risk-adjusted returns.
Macro informed: Bottom-up research is complemented by a top-down view that informs portfolio-level exposures.
ESG integration: The fund promotes environmental and social characteristics according to Article 8 under the Sustainable Finance Disclosure Regulation.
Julien Froger, Managing Director, Head of Europe, iM Global Partner says: “We are absolutely convinced that this experienced team, which has been working together for an extended period, will empower all our investors to access a proven solution. This team operates within a robust, stable, and agile framework that Polen Capital has meticulously developed and refined over decades. This is a timely addition to our iMGP fund range as investors seek strategies that offer different sources of return as well as products that diversify their portfolios. We think this is a compelling offering given that higher base rates are providing elevated yields in the European high yield market.”
Ben Pakenham, Portfolio Manager, Polen Capital, says: “With the team here at Polen Capital we have all the tools required for aiming to generate strong risk-adjusted absolute and relative returns for our investors. The vast experience and track record of the team along with our research-led, high conviction investment policy gives us the comfort to commit to a yield premium through the cycle. For investors with longer-term investment horizons, we aim to convert this excess yield into excess returns as we look to deliver default losses that are better than, or no worse than, the broader market. With support from our exceptional credit franchise in the US, we feel that we have all the pieces in place to maximise returns for clients. I am hugely excited to be at the start of this journey with Polen Capital and iM Global Partner.”
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