Avoca buys Liontrust hedge funds

AVOCA CAPITAL, the Dublin-based manager of collateralised loan obligations, has acquired two high-yield bond hedge funds from UK fund manager Liontrust.

Five credit specialists from Liontrust, including fund manager Simon Thorp, will be hired by Avoca as part of the deal.

The two funds managed by the Liontrust team have £85 million in assets under management. Avoca will pay 3.75 per cent of the value of the assets to be transferred at the time the deal secures approval. At current values that would be approximately €3.6 million.

The move marks a departure for Avoca, which previously offered “long-only” credit funds. Hedge funds take both long and short positions on investments, meaning they can bet on whether they will rise or fall. A bond hedge fund tries to mitigate the risk of losses by selling, or “shorting”, credit.

“This is our first foray into the hedge fund space, so in that way it’s a new area for us. But we’re still doing what we were always doing, which is investment in sub-investment grade credit,” said Alan Burke, joint chief executive of Avoca.

Avoca has its headquarters in Dublin, where it employs 32. The new personnel will be based in Avoca’s London office, which will take its staff there to 11. The European credit investment manager, founded in 2002, has €6 billion in assets under management.