New regime for pariah debt
Aberdeen Asset Management, the hard-hit UK fund manager, has sold its Guernsey-based exotic debt and emerging-market debt funds to the fund managers for an undisclosed sum. The fund is the only one in the UK to specialize in so-called pariah debt issued by countries such as Iraq and North Korea.
The new company, called Convivo Capital Management, is headed by Julian Adams, who previously managed the exotic debt fund, and its chairman is Paul Luke, who was previously head of emerging-market strategy at Deutsche Bank.
Adams is not surprised that Aberdeen wanted to part with a fund that invests in Iraqi debt, but he relishes the opportunity to operate under his own orders. He says: "It's a dream, having your own business." He plans to expand the portfolio of the company from $65 million to $100 million in the medium term.
The exotic debt fund's exclusive focus on pariah debt is unique among UK fund managers. Adams says it is a very positive time for the asset class: "The world is moving in one direction with regard to isolated dictatorships, and that's good news for our funds." He sees North Korean debt as a market outperformer.