TwentyFour Select Monthly Income Ord

Global Bonds

Rated Fund 2017-19. A high yield fuelled by an ‘illiquidity premium’

TwentyFour Select Monthly Income is at the higher end of the risk spectrum as it has the vast majority of its assets in sub-investment grade stock. It currently yields 7.2% and distributes income monthly.

A relatively new investment trust, launched in 2014, it is run by a six-strong team at TwentyFour Asset Management, which specialises in fixed income investing. The trust is diversified across asset-backed securities, high-yield bonds, bank capital, corporate loans, high-yield bonds and leveraged loans.

It is specifically designed to take advantage of the premium returns available from less-traded fixed income investments. Such securities do not offer enough liquidity for open-ended investment funds, but are well suited to a closed-ended vehicle. However, in order to provide investors in this trust with liquidity, the managers offer a quarterly share buyback facility.

In terms of ratings, more than two thirds of the £166 million trust was in bonds rated B or BB at the end of 2018. On a sector basis, 35% was in banks and 31% in asset-backed securities, with smaller allocations to European high-yield, insurance bonds, emerging markets and US high yield.

Its interest rate duration is actively managed, currently averaging 2.9 years, and foreign currency exposure is hedged to sterling.

Going into 2019, the managers maintain a focus on adding only short-duration credit at attractive spreads. A considerable portion of the portfolio redeems or is expected to be called in 2019, which “should provide more predictable performance”.

The trust is popular with investors and its shares traded at a premium to net assets of up to 5.8% during 2018.

Narrative and ratings content all as of 01 January 2019.

See all Money Observer rated funds
Name
TwentyFour Select Monthly Income Ord
Manager
TwentyFour Asset Management LLP
Type
Closed Ended Investment Company
ISIN
GG00BJVDZ946
Sector
Not Categorised
Launched
10/03/2014
OCF
1.18 %
3 Year Sharpe
1.09
Yield
6.9 %
Fund Size
£ 173.7 million
NAV
90
Gearing
96
Discount Premium
4
To generate attractive risk adjusted returns, principally through income distributions. The company intends to invest in a diversified portfolio of credit securities, including bank capital, corporate bonds, high yield bonds, leveraged loans, payment-in kind notes and asset backed securities.
Name
TwentyFour Asset Management LLP
Address
EC3V 3ND, London, United Kingdom
Legal Structure
Closed Ended Investment Company

Managers

David Norris
Joined 09/01/2018

David joined TwentyFour in September 2018. Based in the New York office, he serves as the Head of US Credit as well as one of the portfolio managers of the Multi-Sector Bond team. He is a credit specialist with 30 years’ experience in fixed income markets gained across a variety of senior roles in asset management and investment banking in London, Frankfurt and New York. He has held leadership positions in high yield, credit derivatives, structured products and global credit trading at Credit Agricole, BNP Paribas, Greenwich Capital and UBS. Once a member of the infamous New York Cosmos soccer team, David went on to earn degrees in business at the University of British Columbia, Vancouver and law from the University of Reading in the UK.

Gary Kirk
Joined 03/10/2014

Gary Kirk is a Portfolio Manager and one of the founding partners of TwentyFour AM since 2008. He is on the firm's Investment Committee, which sets the overall risk bias for the portfolios managed by the firm, and his main responsibility is managing the firm's Multi-Sector Bond team. Since 1988, Mr. Kirk has developed an expertise in fixed income markets across a variety of senior roles in asset management and investment banking, including leadership positions at Daiwa Capital, Royal Bank of Canada, CDC Group and Wachovia Bank. Mr. Kirk graduated in Biochemistry from the University of London.

Eoin Walsh
Joined 03/10/2014

Eoin Walsh is a Portfolio Manager and one of the founding partners of TwentyFour AM since 2008. He is on the firm's Investment Committee, which sets the overall risk bias for the portfolios managed by the firm, and his main responsibility is managing the firm's Multi-Sector Bond team. Since 1998, Mr. Walsh has developed an expertise in fixed income markets across a variety of roles including at Citigroup Alternative Investments. Mr. Walsh graduated in Accounting & Economics from the University of Limerick.

Felipe Villarroel
Joined 03/10/2014

Felipe Villarroel is a Portfolio Manager in TwentyFour AM's Multi-Sector Bond team since 2011 and is a member of the Investment Committee. Prior to joining TwentyFour AM, Mr. Villaroel worked as an Asset Allocation and Strategy Analyst at Celfin Capital in Chile, now part of the BTG Pactual group. There, Mr. Villarroel took an active role in developing the team's strategic view of the global macro economy and asset classes. Mr. Villarroel graduated from Pontificia Universidad Catolica de Chile with a Bachelor's degree in Economics and Business Administration before obtaining a master's in Finance from the London Business School. Mr. Villarroel is also a CFA Charterholder.

Mark Holman
Joined 03/10/2014

Mark has 24 years of experience in fixed-income markets, gained in a combination of senior roles in investment banking and asset management. Mark is one of the 9 partners of TwentyFour and serves as the Firm’s Risk Manager with responsibility both for independent market risk oversight of the Firm’s investment portfolios and maintaining the Firm’s risk measurement, management and reporting framework. Before founding TwentyFour in 2008, Mark was one of the original partners at Synapse Investment Management which he founded along with Graeme Anderson in June 2006. Prior to that Mark was a Managing Director at Barclays Capital in London where he established and led various units of its European fixed income distribution business. Mark joined Barclays Capital in March 1999. Prior to that he was an executive director at Lehman Brothers where for 5 years he played a key role in helping Lehman establish their European Credit Business. Mark began his investment banking career in 1990 with Morgan Stanley in fixed income.

Pierre Beniguel
Joined 03/10/2014

Pierre Beniguel is a Portfolio Manager in TwentyFour AM's Multi-Sector Bond team since 2014. He also manages foreign currency hedging and daily funding for a number of funds and managed accounts. He has over five years of experience, prior to TwentyFour AM, in fixed income and previously worked in WestLB's credit trading and special situations divisions. Mr. Beniguel graduated in Mathematics & Economics from University College London.

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