This content is from:Home

Willis spots an expertise gap in bonds

Hugh Willis, head of London-based corporate bond fund start-up BlueBay Asset Management, may lack for assets, but he doesn't lack for ambition.

    His target is E10 billion ($8.8 billion) under management within five years.

    But then, Willis, 41, has the backers to match his impressive credentials as former co-head of European credit arbitrage at J.P. Morgan. Barclays Group and Japan's Shinsei Bank have put up half of the equity. BlueBay's chairman will be none other than Barclays Capital chief and Euromarket legend Hans-Jörg Rudloff.

    "The advent of the single currency and falling interest rates are forcing a fundamental reappraisal of the fixed-income investment process," says Willis. "The liabilities of pension funds remain the same, but the coupon from government bonds has fallen, and the opportunity to add value by taking currency positions has gone. The credit markets look attractive, but there is a lack of expertise. That is the gap we will step into."

    BlueBay's first product will be a long-short hedge fund that invests in European corporates. The inaugural offering will be managed by chief investment officer Mark Poole, a former colleague of Willis's from Morgan's credit arbitrage desk. The firm also plans an emerging-markets debt fund. That is to be overseen by Simon Treacher, who was a top-performing manager at Morgan Grenfell Asset Management in the mid-'90s and recently worked at Louis Bacon's Moore Capital. BlueBay is headquartered in the smart St. James district, and Willis expects to triple the staff over the next six months, to 35.