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GAM Star Credit Opportunities

Elite Rated by FundCalibre

The fund seeks to produce a high level of income, investing predominantly in investment grade (high quality) bonds. It is a ‘safety first’ fund with very low turnover, as their process looks for loans from companies, which they can buy and hold for 10 years. Very little of what they own yields less than 6% at the initial purchase point and this gives them far less interest rate sensitivity, which is particularly valuable in the current volatile environment.

Company Description

GAM was established in 1983 as an independent, active investment manager. Jeremy Smouha, CEO of Atlanticomnium UK (Ltd), was a founding member of GAM. Atlanticomnium S.A. was set up in 1976 by Jeremy and Anthony Smouha’s father, Richard, from whom the brothers learnt their trade. Atlanticomnium has managed assets for GAM since 1985 and are currently the investment adviser for multiple GAM bond funds.

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Fund Manager

This fund is one of a trio run by Anthony Smouha and Gregoire Mivelaz, who collectively have over 50 years’ experience in investment, with the CEO Jeremy Smouha bringing his 30 years’ experience to bear. Anthony and Gregoire have managed this fund since its launch in July 2011.

Factsheet_anthony_smouha_gam_credit_opps

Our mantra is yield, value and capital preservation. Within this context we look for the simple themes and credits. This means asking the right questions

Anthony Smouha - Fund Manager

The Investment Process

They are safety first investors and their basic philosophy is that the chance of investment grade companies defaulting on their loans is much lower than high yield companies, especially over the longer term. They look at companies with an equity analyst’s mind set. Of course the usual credit analysis is important, but understanding the company, its business model and management capability are equally important.

Risk

Their equity analysis mind set looks at profitability and growth potential, sustainability of the business model, strong franchise value and a supportive macroeconomic backdrop. They categorise 52% of their portfolio as highly liquid, 37% as liquid and 11% as less liquid. Checks on liquidity are made daily.

Our Opinion

The team benefits from an open and communicative culture that fosters frequent challenging of ideas. Their process for determining a company’s credit worthiness is stringent. This is a very successful fund run by a team who have many years’ experience, yet still have an intense passion for what they do.

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