Invest AD offers pioneering GCC bond investment product to institutional investors

Sunday 14 May 2017

Abu Dhabi - MENA Herald: Abu Dhabi-based asset manager Invest AD has partnered with Julius Baer to offer an innovative GCC fixed income investment note that responds to the fast changing investment requirements of regional institutional investors, such as insurance firms, pension funds and sophisticated family offices.

The new investment note, structured by the Swiss Bank Julius Baer is actively managed by Invest AD Asset Management PJSC. The investment note targets 5.5 percent annual total returns derived from a 4.5 percent p.a. coupon paid out quarterly. The investment differs from currently available investment options as it offers enhanced returns as well as regular cash flows and is fully tradable, with Julius Baer acting as a market maker.

Investors in the region are increasingly looking to create more balanced portfolios, with higher allocations to low-risk bonds and Sukuk, whilst still receiving attractive returns.

The note provides leveraged exposure to an actively managed portfolio of selected dollar-denominated bonds and Sukuk in the high-investment grade category – rated A minus and above.

“With over three decades of experience in regional markets, Invest AD has a unique view of the changing investment landscape, and our strategy is to bring innovative products to the table that meet the exact requirements of institutional investors,” said Faras Al Ramahi, Chief Executive Officer of Invest AD.

“This is a perfect example. We have seen strong interest for an investment product that gives exposure to low-risk bonds, delivers regular income, and meets return expectations at a time of low benchmark rates,” he added. “Working closely with Julius Baer, Invest AD is offering a highly liquid product, allowing investors to enter and exit according to their strategy and appetite.”

Institutional investors in the region have been relatively under-invested in fixed income markets, compared to their global peers, and now many are required by regulators to create more balanced and diversified portfolios. For example, insurance companies in the UAE, are required by the UAE Insurance Authority to limit their exposure to real estate and UAE listed equities to 30 percent each, while exposure to A-rated bonds and UAE government bonds can reach 80 percent and 100 percent respectively.

“Our product specialists in collaboration with Invest AD have designed the characteristics of this note to meet the needs of investors seeking to increase exposure to fixed income markets and require higher returns than currently available,” said Nico Tschui, Chief Representative Officer of Julius Baer in Abu Dhabi.

The note will be managed by Invest AD Asset Management PJSC, a subsidiary of Abu Dhabi government-owned Invest AD. The company, which is regulated by the UAE Central Bank and the Securities and Commodities Authority of the UAE, was one of the first financial institutions in the Middle East to launch Luxembourg-registered UCITs funds, and to be compliant with the CFA Institute’s Global Investment Performance Standards. The note will only be available to institutional investors which meet the Emirates Securities and Commodities Authority definition of a “Qualified Investor”. The note is not available to individual investors in the UAE.

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