Active management is true fund management.

Kraft High Yield

Selective and disciplined Nordic credit management

Kraft High Yield is an actively managed fixed income fund with a focus on the Nordic credit market. The fund is managed by Øivind Thorstensen and Simen André Aarsland Øgreid, who through a fundamental process invest in companies with robust business models, predictable cash flow and sustainable capital structures.

Value management – Our three pillars

Our asset management is based on three mandatory principles that serve as a compass for all investment decisions:

– Protection of principal: This is our number one priority. Through a deep dive into loan documentation and collateral packages, we seek to secure our position in the capital structure. We only invest where we believe the downside is well protected.

– Maintain portfolio liquidity: We strive for a composition that ensures freedom of action in all market phases. Liquidity is an active choice that allows us to act quickly when opportunities arise or risks change.

– Relative pricing of risk: We rely on our own proprietary credit analysis rather than external assessments. By identifying inefficiencies in the market, we can find bonds where the credit spread results in overpaid risk.

Strategy – Active value creation

Excess return in the fund is created through active portfolio construction and ongoing repricing of risk. We distinguish ourselves by being dynamic in our approach:

– Active repricing: We closely monitor company fundamentals and market conditions. This involves a disciplined approach to taking profits when a security is fully priced, and the ability to take losses if the fundamentals of an investment weaken.

– Utilization of the yield curve: We actively analyze the yield curve of issuers to identify mispriced maturities. By moving capital between different maturities (curve arbitrage), we capture excess returns based on relative value.

– Structural understanding: We consider order of priority and security across issuers and sectors. This in-depth understanding of the structural aspect is the cornerstone of our search for alpha for unitholders.

Our mandate

The fund has a broad Nordic mandate, but has the flexibility to invest in selected companies outside the Nordic region when we see particularly attractive opportunities. The aim is to build a robust and well-diversified portfolio, typically consisting of 35-40 different investments with good geographical and sector diversification. The fund has a low interest rate sensitivity and aims to maintain an average interest rate duration of less than 2 years. The fund is managed in accordance with the established UCITS regulations, which ensure a good framework for risk diversification and liquidity.