The Groupama Axiom Legacy 21 fund crosses €500m AuM mark

The fund is a Groupama Asset Management product, managed by financials specialist Axiom Alternative Investments, the French asset manager with EUR1.8 billion under management and offices in London and Paris.

This means, that 2021 is a pivotal year for Groupama Axiom as the fund will now gradually position its holdings towards bonds that mature in the years to 2025 (insurance companies as part of the transition to Solvency 22 and banks as per the changes brought by CRR2 and BRRD23).

With an average spread of 411 basis points (as of 12/31/2020) for an average agency rating of BB+, Groupama Axiom Legacy 21 has significant attractions in the current credit market given the spread of the Corporate BB index stands at 250 basis points (as of the same date).

The objective of the fund is to obtain, over a recommended minimum investment horizon of four years, an annualized return equal to or higher than that of the Euribor three months +3% index (after deduction of management fees).

David Benamou, Chief Investment Officer at Axiom Alternative Investments, commented : “The impressive inflows seen in 2020 are testament to our investment strategy and the attractiveness of this fund’s returns. Looking ahead to 2021, with a significant majority of the Legacy bonds in the portfolio hitting regulatory maturity this year, we believe that the financial credit universe represents an incredibly exciting opportunity and believe that this fund is well positioned to take full advantage of the cycle.”

 

* EBA – European Banking Authority ** PRA – Prudential Regulation Authority

 

1 Basel 1, 2, 3: the Basel Committee is an informal committee of central bankers and regulators that makes proposals on banking regulations. Though not legally binding, these proposals are subsequently transposed in national jurisdictions. Basel 1 (“Cooke ratio”) was the first international solvency framework, with a simple approach (8% ratio and almost universal risk weights, with the exception of public entities and real estate.) Basel 2 introduced rating-based risk weights to better take into account the actual credit risks. Basel 3 transformed regulatory capital and drastically increased the minimum capital requirements.

2 Solvency 2 : Solvency 2 is a European regulatory reform of the insurance world. In line with Basel II, its objective is to better adapt the capital required of insurance and reinsurance companies to the risks they incur in their business.

3 CRR2 et BRRD2 : The Capital Requirement Regulation is a legal transposition of Basel 3 in the European Union. Being a regulation, it is immediately applicable. BRRD (Bank Recovery and Resolution Directive) establishes a common approach within the European Union (EU) to the recovery and resolution of banks and investment firms. The BRRD represents an important step forward in ensuring that the EU effectively addresses the risks posed by the European banking system. On 16 April 2019, a new set of rules was adopted – the “banking package” (CRR2, CRD5, BRRD2) – which defines and extends the scope of this legal framework. Without getting into the details of this package, the key aspects include a new transition period introduced for securities that qualified forregulatory capital under CRR1 but not under CRR2. CRR2 therefore opens up new investment opportunities for securities which will be phased out in 2025.

 

Description	Groupama Axiom Legacy 21
Code ISIN	FR0013251881 unit P
Classification	Fixed Income (Subordinated Financial Debt)
Legal status	OPCVM
Benchmark	Euribor 3 months +300bps
Type of investment fund	UCITS
Capitalization/ Distribution	C
Bloomberg code	GRAL21P Equity
Total Net Assets	EUR506m as at 04/02/2021
NAV valuation period	Daily
Subscriptions / redemptions	Every day up to 11:00:00, Paris time – NAV unknown – Settlement D+3
Maximum management fees (%)	0.70 %
Entry charge (%)	Paid into the UCITS: None Not paid into the UCITS: 5%
Outperformance commission (%)	10% incl. tax above the Euribor + 3% net of management fees
Redemption charge (%)	Paid into the UCITS: None Not paid into the UCITS: None
Custodian bank	CACEIS BANK, Paris Branch

 

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