Virtus Investment Partners has raised USD215 million in a common stock offering for its newest closed-end fund, Virtus Global Multi-Sector Income Fund VGI, which began trading on 24 February on the New York Stock Exchange.
Assuming full exercise of the underwriters’ overallotment option, which may or may not occur, the fund will have raised approximately USD247 million. The offering was led by Morgan Stanley, Citigroup, and UBS Investment Bank.
The fund, whose investment objective is to maximise current income while preserving capital, is managed by Newfleet Asset Management, a Virtus affiliate with USD8.1 billion in assets under management at December 31, 2011. The Newfleet team has a long track record in multi-sector fixed income investing with an approach that utilises extensive credit research to identify and invest in undervalued areas of various sectors of the global bond markets.
"The Virtus Global Multi-Sector Income Fund gives investors an opportunity to benefit from broadly diversified holdings across the major domestic and international fixed-income sectors, a strategy that offers the potential to generate an attractive yield in the current fixed income market environment," says David L Albrycht, senior portfolio manager of the fund and chief investment officer, Multi-Sector Fixed Income Strategies, at Newfleet.
Under the direction of Albrycht and portfolio managers Benjamin Caron, Kyle A. Jennings, and Daniel Senecal, the fund uses a value-driven approach that first overweights or underweights fixed income sectors on a top-down basis, then uses fundamental research to assess specific investments in the portfolio.
"This is a successful and time-tested discipline that we have used for more than two decades to manage multi-sector portfolios, including Virtus’ largest open-end mutual fund, the Multi-Sector Short Term Bond Fund," says Albrycht.
The fund may also use financial leverage, which is anticipated to initially take the form of a credit facility, to increase investible assets and potentially enhance the level of cash distributions to shareholders.
The Virtus Global Multi-Sector Income Fund is the second new closed-end fund for Virtus in the past year. Last July, the company completed an IPO for the Duff & Phelps Global Utility Income Fund DPG -0.62% , which is managed by another affiliated manager, Duff & Phelps Investment Management Co. of Chicago. The Newfleet Multi-Sector team also co-manages, with Duff & Phelps, the Virtus Total Return Fund DCA +0.27% , a closed-end fund that appointed Virtus as investment adviser and administrator in December 2011. Virtus now manages eight closed-end funds with USD5.9 billion of total assets.
"Our goal is to provide financial advisors with distinctive solutions that they can offer their clients to address their individual investment needs, and we believe the Virtus Global Multi-Sector Income Fund meets a particular need for generating yield," says George R Aylward (pictured), president and chief executive officer of Virtus. "We are pleased to partner with a strong syndicate and their financial advisors who understand the benefits that Newfleet’s expertise in multi-sector investing can offer their clients."