Collins Capital has launched the Collins Long/Short Credit Fund (CCLIX/CLCAX), a mutual fund offering a true long/short credit strategy that dynamically adjusts exposure throughout the credit cycle.
"Traditional bond portfolios may be the most dangerous part of investors' portfolios today and there are few established alternative credit strategies available to mitigate that risk," says Dorothy Weaver, Co-Founder, Chief Executive Officer and Chief Investment Officer of Collins Capital. "We are six years into the credit recovery, yields are compressed, froth is building and the 'beta trade' is over. We believe the environment for a long/short approach to credit is ripe and we are excited to partner with a manager that has a demonstrated ability to successfully navigate and take advantage of more challenging periods in the credit cycle."
The fund attempts to generate absolute returns over a complete market cycle by primarily investing in a portfolio of long and short investments in credit-related securities with active management of net exposure. Advisors and investors can use the fund as a substitute for long-only high-yield, as a risk-managed supplement to core fixed-income, or as a complement to their alternatives' allocation.
The fund's sub-advisor, Pinebank Asset Management, LP, manages a portfolio of generally between 25 and 50 investments by combining an in-depth understanding of credit cycles and market liquidity along with bottom-up and event-driven credit selection. Pinebank maintains the flexibility to adjust the portfolio's net long and short exposures in different market environments, with the goals of providing downside protection for investors and of generating positive returns independent of market direction.
"The flexibility to actively manage the net exposure through the credit cycle is a key differentiator for the Fund," says Oren M Cohen, Chief Investment Officer and Head Portfolio Manager of Pinebank, who has managed the strategy since 2004. "We look forward to working with Collins to help a wider array of investors use this distinct strategy to not only aim to achieve consistent returns in all types of markets, but also to improve the long-term diversification of their fixed-income portfolios."