Nomura Asset Management (AM) has announced that its Corporate Hybrid Bond Fund has surpassed $500m in assets under management (AUM).

The fund, which was launched in August 2023, is managed by Julian Marks and Kapish Patel.

Nomura AM said the milestone reflected growing investor interest and demand for corporate hybrid debt as a solution for income-seeking portfolios in an uncertain macroeconomic environment.

Its Corporate Hybrid Bond Fund targets institutional and wholesale investors looking for yield opportunities from non-financial investment grade European and other development market corporate issuers.

Nomura AM noted that demand for corporate hybrids has been rising as issuers across Europe have generally maintained strong fundamentals and commitment to the asset class.

The market was also boosted when Moody’s increased the equity credit it assigns to corporate hybrid bonds from US issuers from 25 per cent to 50 per cent in early 2024.

This led to an increase in issuance from US companies and contributed to the overall market passing $300bn in size.

“Wealth and institutional clients across Europe have shown strong interest in corporate hybrids and the growth of the Nomura Corporate Hybrid Bond Fund is testament to the excellent reputation Julian Marks and Kapish Patel enjoy in this asset class,” commented Nomura AM head of distribution, EMEA, Doug Stewart.

“This strategy is fast becoming a cornerstone allocation for investors seeking stable income with a conservative risk profile.”

Nomura AM head of hybrid bonds, Julian Marks, added: “Corporate hybrids are continuing to mature as an asset class. Investors are recognising the high quality of the issuers, the defensive characteristics of the structure and their attractive spreads over senior debt.

“Surpassing $500m AUM in just two years demonstrates that investors value our disciplined, bottom-up approach and strong issue selection-led track record.”

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