Neuberger Berman has launched a new bond fund aimed at the Asian hard currency bond market to capitalise on the increasing depth and liquidity available in the region.
The US group said the new fund, the Dublin-domiciled Neuberger Asian Debt - Hard Currency fund, was part of wider plans to offer further strategies centred on the region.
This is set to see the development of an Asian local currency bond fund as well as a dedicated Chinese bond strategy in due course.
All three were formerly with ING IM before being among the large number of emerging market debt specialists to have joined Neuberger Berman in early 2013.
At a roundtable event in London to announce the fund, Singh said it would invest across both sovereign and corporate debt, which would allow it to capitalise on increased liquidity among businesses. It can invest in both high yield and investment grade rated bonds.
Indicating early positions in the fund, Singh said he was focusing on subordinated bank debt from Hong Kong and Singapore issuers, as well as utilities. This is while underweighting sovereign and quasi-sovereigns, while being overweight Chinese property.
‘Since 2008, growth of corporate bond markets has outpaced that of government bonds by nearly three times and we anticipate local-currency corporates to be the fastest-growing sector in emerging Asia debt for the foreseeable future,’ Singh said.
‘Corporates already account for two-thirds of Asia’s hard-currency market, with China’s state-owned enterprises leading the way.
‘Asia is the deepest and most liquid of the emerging debt capital markets, partly as a result of the concerted efforts of the authorities to bolster themselves against a repeat of the financial crises of the late 1990s,’ he added.
The new fund is registered for sale in the UK and across Europe and Asia. More details on the two other funds in development would be made available at a later date.