LONDON (Reuters) - Investment manager Neuberger Berman said on Thursday it had opened a new long-short credit fund for external investors after seeding it with an initial $25 million (£16 million).
Easy monetary policies since the financial crisis have fuelled demand for the higher yields on offer in credit markets, but changes in monetary policy look set to fuel volatility and increase interest in a fund that can win in any market.
"While credit quality in general remains historically robust among developed market corporate bond issuers, default rates are forecast to rise and higher interest rates could have an impact on flows in the market," said fund manager Norman Milner.
"In an environment of tight spreads and even tighter liquidity, increased volatility in credit markets would not be surprising going forward. This means investors may now need to be more creative to control their risk."
The team managing Neuberger's new fund runs an additional $450 million in credit strategies, while the broader company manages $104 billion across its fixed income strategies.