South African wealth manager, Saffron Wealth, has launched its first offshore income product on the Prescient Global Funds ICAV in Ireland.
Offering daily liquidity, the fund will also be available to South African investors through a feeder fund with Boutique Collective Investments.
The dollar-denominated portfolio has a wide investment universe, with a benchmark of the SOFR three-month rate (Libor's replacement) plus 3%.
The fund may invest in fixed or floating rate bonds and notes, credit linked notes, convertible bonds (including up to 10% of net assets in contingent convertible bonds), index linked debt securities, debentures, zero coupon and coupon-bearing and deferred interest instruments.
It may also invest directly or indirectly, in short-term money market instruments such as commercial paper, certificates of deposits, treasury bills and securities of property corporations quoted on recognised exchanges.
The Saffron value-add comes through the active allocation between emerging and developed markets, with an upper limit to emerging market debt of 50%.
The main drivers of the allocation decisions are the risk-adjusted cost of developed market debt capital and emerging market risk-adjusted risk premia.
The fund will be managed according to a detailed investment policy quantifying strategic and tactical limits. The broad mandate of the fund allows for 100% exposure to developed market sovereigns and corporates to reduce risk and protect capital during periods of risk aversion.
Saffron CEO Brandon Quinn said: "We have been managing global hard currency exposure as a subset in our existing income funds for more than 12 years. Many investors have enquired about creating a strategy that focuses only on the offshore space.
"At a high level, the fund can be invested 50% in emerging market and 50% developed market debt and debt-related securities. We can invest in government issued and corporate debt across the capital structure, with a multi-sector focus for diversification."
Hayden Reinders, head of business development and client management at Prescient Fund Services (South Africa and Ireland) added: "We are very excited to have been involved in this, the first international launch for the team at Saffron Wealth.
"Prescient's Irish ICAV platform represents an excellent springboard for fund managers who want to deliver UCITS fund products to a global fund audience. We have continued to expand our team and our expertise in Dublin in 2022 to provide first class fund platform and administration services, with full governance support for new UCITS launches. We are proud to have provided this platform for Saffron Wealth."
