(Reuters) – CQS, the London-based global multi-strategy credit-focused asset management firm with $17.7 billion in assets, is looking to grow its presence in the United States, Xavier Rolet, who took over the chief executive officer role from its founder in January, said.
“The U.S. has 55% of the world’s financial assets and is the largest owner of financial assets globally,” Rolet, who succeeded billionaire investor Michael Hintze, said in a recent sitdown interview.
Less than 25% of CQS’ assets under management is exposed to the United States. Rolet said CQS plans to continue to invest in the United States as a source of global investment returns and in providing client-focused asset-allocation strategies.
Founded in 1999, CQS has offices in London, New York, Hong Kong and Sydney. The asset manager’s investors include pension funds, insurance companies, sovereign wealth funds, endowments and foundations and private banks.
The firm’s flagship $3.2 billion Directional Opportunities Fund, managed by Hintze, has gained 7.3% this year as of June 19, while the firm’s ABS Fund has gained 4.27% for the same period.
The Directional Opportunities fund has annualized returns of 14.3% since its inception in August 2005, while the firm’s ABS Fund has annualized returns of 16.61% since its inception in October 2006. The $7 billion CQS Multi-Asset Credit Fund is up 3.83% so far this year as of June 19.
Rolet said the firm is taking advantage of any volatility in the credit markets. “We take a relative value approach across geographies and sectors,” he said. “Our multi-asset approach allows us to actively manage and take advantage of dispersion, and there is growing dispersion globally.
“Our favorite strategies for the second half are short-duration structured credit, European mid-market special situations/distressed, relative value credit and Significant Risk Transfer trades,” he added.
Rolet said the insatiable appetite for yield and income against the backdrop of an expected interest-rate cut later this month by the Federal Reserve played a factor in targeting U.S. markets.
“We look at our business strategically and with a strong client focus,” he said. “Sure, rates do weigh on short-term positioning, as do other factors, but bespoke solutions are designed to be flexible enough to maximize superior returns over the long-term.”
Rolet, a former equities trader at Lehman Brothers, stepped down as chief executive of the London Stock Exchange in 2017 after almost a decade, taking the business beyond its roots in stock trading and helped turn it into a post-trade and information powerhouse.
Reporting By Jennifer Ablan; Editing by Susan Thomas