Modern rather than traditional

Alternative investments have grown significantly over the past decades. Diversification benefit and attractive returns have been the main drivers for this growth. Now that saving has not been rewarded for some time, investors are looking for alternatives. In this series modern rather than traditional, we discuss alternative investments.

Diversified Structured Credit Pool 5 year track record

This month, the Diversified Structured Credit Pool celebrates its fifth anniversary. Over the past five years the pool has realised a net annualized return of 4.0% (USD) since inception and the pool saw its assets under management (AUM) grow to over 400 million USD. The pool has delivered top-quartile performance within its international peer group and has been recognised in its success by winning multiple awards including the “Best Fixed Income/Credit FoHF” by HFR in 2020.

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Distressed Debt:a lifeline for businesses in trouble

Distressed debt is a form of alternative credit – a collective term that covers a variety of non-traditional bond classes. It consists of bonds issued by ailing business and that are trading at a price considerably below their par value. This big discount could be for two reasons: either the company is experiencing financial difficulties and is struggling to pay its interest and redemptions – and may have already applied for a suspension of payments – or because the market believes there’s a growing probability that the company will have to file for bankruptcy.

Here, Remko van der Erf, managing director, fixed income & alternative credit in Van Lanschot Kempen’s Manager Research Solutions team, answers our questions about distressed debt, what’s required for success in managing the asset class and the type of investor it may be suitable for.

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The views expressed in this document may be subject to change at any given time, without prior notice. Kempen Capital Management N.V. (KCM ) has no obligation to update the contents of this document. As asset manager KCM may have investments, generally for the benefit of third parties, in financial instruments mentioned in this document and it may at any time decide to execute buy or sell transactions in these financial instruments.

The information in this document is solely for your information. This article does not contain investment advice, no investment recommendation, no research, or an invitation to buy or sell any financial instruments, and should not be interpreted as such. This document is based on information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such.

The views expressed herein are our current views as of the date appearing on this document. This document has been produced independently of the company and the views contained herein are entirely those of KCM.

KCM is licensed as a manager of various UCITS and AIFs and to provide investment services and is subject to supervision by the Netherlands Authority for the Financial Markets.