Orange Capital, $ 1 billion under management, has announced its intention to withdraw from the market after 10 years of relative success - based on AMarkets.
The creators of the fund say that the market has changed dramatically in recent years. Even amid falling liquidity in debt assets with a short expiry period, they tend to grow more intensively than other asset classes. This is especially true with high yield bonds. However, in the current environment of increased instability of credit instruments with high risk are no longer suitable for portfolio investments. Too much of a risk and the likelihood of loss. Now, many funds are in this situation, because of the very low level of liquidity, it is extremely difficult to sell assets quickly in the interests of the client. In December 2015, another major player Investment managerThird Avenue has announced plans for a high-yield bond fund liquidation. It was eliminated and the possibility of early exit from the fund. Innovation has added even more panic in the market of high-risk corporate debt.
Last year, Orange Capital fund fell by 7.4%. Prior to that, since its introduction in the market, he earned an average of 9.7% per year.