Multi-Strategy Credit

Global, high conviction credit selection with a focus on quality income

Reasons to invest

High-conviction, quality income

By searching for the most attractive instruments across the capital structures of issuers worldwide, we seek robust capital returns and an attractive, consistent yield.

Flexible

Our strategy is flexible and dynamic, investing across geographies, ratings, capital structures, sectors and instrument types.

Downside defence

We strive to shield our return-seeking positions, allocating one-third of the portfolio to bearish strategies that defend against market falls.

Experienced team

A skilled, integrated team with a strong record of implementing relative-value credit strategies since 2004.

ESG integration

Our investment process incorporates Federated Hermes’ leading ESG integration and engagement insights.

Strategy overview

Fraser Lundie

By combining global, high-conviction credit selection with defensive trades, we aim to generate strong capital returns and an attractive level of income.

Fraser Lundie, CFA
Head of Fixed Income - Public Markets

Why Multi-Strategy Credit?

As investors search for income, approaching credit in the right way is more important than ever. We aim to achieve an attractive level of income with two-thirds of the portfolio comprising high-conviction long-only investments in corporate bonds, loans, convertible bonds and derivatives.

One-third of the portfolio is allocated to a range of bearish strategies that aim to defend against market falls and portfolio volatility. Defensive positions include outright short, curve and capital structure trades. The aim is to generate positive absolute returns throughout the market cycle.

We are unconstrained by benchmarks and invest across geographies, ratings, sectors and instrument types, including bonds, loans and derivatives. We seek exposure to attractive sources of credit quality and income in the US, Europe and emerging markets. This provides us with more opportunities to exploit differences in valuation and potential return. It also provides better access to liquidity.

How we invest

Identifying sources of risk and opportunity
Disciplined bottom-up research
ESG integration and engagement

Investment philosophy

Active, high-conviction global relative value across capital structures

We believe:

  • Seamless integration of ESG and sustainability considerations, coupled with active engagement, is critical to sustainable long-term performance.
  • A high-conviction, active credit-selection process, guided by top-down analysis is essential to outperforming in both bull and bear markets.
  • Issuer selection universe beyond the US and Europe, including emerging markets, can create more opportunities and diversified sources of return.
  • Security selection is as important as company selection, searching capital structures for optimal instruments opens opportunities.
  • Downside defence improves risk-adjusted returns – we seek to preserve capital in down market environments.

Investment process

Multi strategy credit infographic

Team

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Fraser Lundie

Fraser Lundie, CFA

Head of Fixed Income – Public Markets, Federated Hermes Limited

Nachu Chockalingam

Nachu Chockalingam, CFA

Senior Credit Portfolio Manager, Federated Hermes Limited

Vincent Benguigui

Vincent Benguigui

Senior Credit Portfolio Manager, Federated Hermes Limited

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Product information

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Insights

Read our latest portfolio perspectives

Our Purpose

To deliver Sustainable Wealth Creation

Like all our investment capabilities, Federated Hermes Multi-Strategy Credit aims to deliver Sustainable Wealth Creation: the generation of wealth through investments that enrich investors, society and the environment over the long term.

Our business provides three equally powerful pathways to achieving this aim. Federated Hermes Multi Strategy Credit features in the Active ESG route.

Active ESG on blue background

Responsible, active investing for long-term performance.

Federated Hermes
Multi-Strategy Credit

Sustainable on green background

Thematic and values-based approaches for sustainable outcomes.

Impact on orange background

Mission-led investment strategies to create positive impact.