Two firms are touting the launch of a new high income fund.
Chicago's RiverNorth Capital Management and Oaktree Capital Management have launched the RiverNorth/Oaktree High Income Fund. RiverNorth serves as adviser to the fund, while Oaktree co-manages the fund as sub-adviser to RiverNorth.
The new mutual fund seeks total return via long-term capital appreciation and income. It aims to do so by capitalizing on market inefficiencies in both closed-end funds and the credit markets.
The fund provides daily liquidity and allocates its assets among three strategies. RiverNorth manages a closed-end fund strategy, which invests across all asset classes in the closed-end fund sphere. Oaktree manages senior loan and high-yield bond strategies, which will be tactically managed based both on market opportunities and the anticipated risk-reward trade-offs between the two asset classes.
"A lot of investors are saying today what do i do from an income standpoint. This fund combines two firms' niche strategies into an attractive an attractive alternative income fund," Patrick Galley, chief investment officer of RiverNorth, told Money Management Executive.
The fund speaks well to RiverNorth's focus on less efficient markets, generating excess return, and "being cognizant" of asset growth and closing them at appropriate levels, Galley said. It also provides an opportunity for Oaktree, which is known for its institutional distressed debt/credit capabilities, access to mainstream retail investors, he added.
The Fund’s portfolio managers are Galley and Stephen O’Neill of RiverNorth, and Sheldon Stone and Desmund Shirazi of Oaktree.
Chicago-based RiverNorth managed $2.1 billion in assets as of Sept. 30, 2012. Oaktree, which is based in Los Angeles, managed $81 billion in assets as of Sept. 30, 2012.