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Angel Oak Capital Advisors to acquire Rainier High Yield Fund


Angel Oak Capital Advisors is acquiring the Rainier High Yield Fund as part of the Angel Oak Trust. 

Shareholders voted to approve the reorganisation of the Fund and its investment team into the Angel Oak High Yield Opportunities Fund. The adoption will add approximately USD40 million in assets to Angel Oak Capital’s nearly USD5.5 billion in assets under management and further augment the company’s fixed income investment product offering.

Joining Angel Oak Capital are Matthew Kennedy, CFA, and James Hentges, CFA, two seasoned investment professionals who have led Rainier Investment Management’s high yield mutual fund since its inception in 2009. Under Kennedy’s and Hentges’ tenure as Portfolio Managers, the Fund has earned an overall rating of four stars from Morningstar in the high yield bond category out of 646 funds as of 31 March, 2016, based on risk-adjusted returns. Additionally, the Fund was ranked by Morningstar in the top 28 per cent and 16 per cent out of 768 and 530 high yield funds for the one-year and five-year periods ending 31 March, 2016, based on total returns. Kennedy previously worked with Angel Oak Capital’s Co-CEO and CIO, Sreeni Prabhu, and other members of the investment team at Washington Mutual earlier in their careers.

“Matt and Jim share Angel Oak’s focus on generating superior risk-adjusted returns while minimising downside risk in their portfolios,” says Prabhu. “We look forward to the experience and tenure that Matt and Jim will bring to the Angel Oak team, as their proven philosophy of teamwork and consistency will integrate well with Angel Oak’s culture.”

The Angel Oak High Yield Opportunities Fund seeks to provide investors with current income and capital appreciation. The Fund aims to maximise long-term risk-adjusted returns through capital preservation, diversification and liquidity by investing principally in high yield corporate bonds concentrated on BB and B rated issuers. Over time, the Fund could (or may) benefit from additional capabilities in hedging credit risk as well as the analytical and fixed income trading skills already present at Angel Oak.

“Adopting this fund signals the next step in the evolution of Angel Oak’s business and product development,” says David Silvera, Director of Corporate Development. “As we branch out into more traditional fixed income investing from the alternative structured credit universe, we are expanding the way we serve clients through adjacent product development. We’re pleased that Matt and Jim will have such a crucial role in this process, as they help foster opportunistic and efficient implementation of investment ideas.”

Matt and Jim will be joining the Angel Oak Capital team as Senior Portfolio Managers and will continue to manage the Fund from Seattle, Wash., where they’ll be supported by members of Angel Oak’s investment, research, risk management, operations and compliance teams based in Atlanta, Ga.

In December 2015, it was announced that Manning & Napier would acquire a majority stake in Rainier Investment Management. The deal is expected to close in the second quarter.

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