18/01/2012 Author: Elana Margulies

Babson multi-strategy increases debt exposure

Babson Capital Management, the $137bn global asset manager, is to increase exposure to debt markets through its multi-strategy hedge fund.

Managing director in charge of the offering, William Awad, said: “If you look at debt spreads versus equities, debt spreads seem attractive now compared to historical averages.”

The strategy, which launched in November 2006, plans to use cash to deploy capital to debt markets. Aside from targeting between 5-10% of its portfolio, it has long positions in global small-cap equities within Europe, select residential credit, US event-driven equities and Mena equities. It has short exposure to sovereign credits in the Eurozone and CMBS.

Awad said he is also looking at engaging a large-cap European equity team from sister firm Baring Asset Management in the UK to help manage some of the multi-strategy offering’s allocation in that space.