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CrossingBridge Nordic High Income Bond Fund in registration

edited July 15 in Fund Discussions
https://www.sec.gov/Archives/edgar/data/1141819/000089418924004051/crossingbridgenordic485a.htm

Excerpt:

Principal Investment Strategies

Under normal market conditions, the Fund seeks to achieve its investment objective by investing at least 80% of its net assets, (plus the amount of any borrowings for investment purposes) in income producing bonds that are issued, originated, or underwritten out of the Nordic Countries (as defined below). The Adviser considers the Nordic Countries to be Denmark, Finland, Iceland, Norway and Sweden. The Adviser will construct the Fund’s portfolio by investing in corporate bonds including, but not limited to, fixed or floating rate bonds, zero-coupon bonds and convertible bonds, and bonds issued by governments, government agencies or government instrumentalities of the Nordic Countries.
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Comments

  • How niche can you get?
  • May be David Sherman will chime in why there should be investor interest for these bonds and whether he plans to hedge currency risk.
  • @BaluBalu My first thought was: Is this a bond or currency play? Since it was me asking, I just figured it was another of those subtle things I just did not appreciate.
  • edited July 16
    From Form N-1A:

    "The Adviser manages currency risk, when appropriate, by hedging foreign currency exposure typically,
    and primarily, with forward currency contracts. A forward currency contract is an obligation to purchase
    or sell a specific currency at a future date, which may be any fixed number of days from the date
    of the contract agreed upon by the parties. The Fund may also manage currency risk by investing
    in bonds denominated in U.S. dollars, such as Yankee bonds."
  • I saw that in the link in the OP but it does not tell me the managers' view on currency hedging and perhaps he will never disclose more than the vague language in the SEC docs.
  • From David Sherman's Q1 2024 commentary: https://blog.crossingbridgefunds.com/blog/q1-2024-commentary-getting-off-the-benchmark


    "There are good players overseas - Having been involved in the Nordic high yield market since the mid-2000s, we have developed our knowledge base and found opportunities in bonds with better credit metrics, higher yields and better covenants than we find in the U.S. high yield market. By comparison to the U.S. market which has approximately $1.4 tn in bonds outstanding, the Nordic market is tiny, but growing fast, from less than €14.0 bn in 2007 to over €56.0 bn in 2023. So far, we have found sufficient new issuance activity and secondary market liquidity to justify our participation in this market. With respect to yield, the graph above shows that the average credit spread for Nordic high yield bonds has been consistently higher than the option-adjusted spread of the ICE BofA US High Yield Index, on average by 211 basis points, since early 2018. In its earlier days, the Nordic market was highly concentrated in oil & gas and shipping but is much more diverse today. Shipping represents about 7% of the market and oil & gas represents approximately 16%.24 The typical Nordic high yield credit has lower net leverage than we find in the U.S. Nordic bonds generally have 3- to 5-year maturities, are floating rate, are secured by assets and provide strong bondholder protections including debt incurrence and dividend limitations and, sometimes, maintenance requirements (e.g. minimum liquidity). The Nordic bond market reminds us of the leveraged loan market of the early 1990s when investors achieved significantly better returns with less risk than the leveraged loans we see today."

    ***
    But, that's not all. Here's a recent press release on an investment by Crossing Bridge in a Nordic market investment manager.

    PLEASANTVILLE, N.Y. , June 28, 2024 /PRNewswire/ -- CrossingBridge Advisors, LLC ("CrossingBridge") is pleased to announce a strategic partnership with NCI Advisory A/S ("NCI Advisory"), a strong performing debt asset management firm based in Denmark .

    David Sherman , CEO of CrossingBridge, states, "The Nordic debt market has provided us with attractive investment opportunities. Establishing a strategic cooperation with an experienced, local team is crucial for our future growth in the Nordics. We have worked with the NCI Advisory team on several transactions and found a good cultural and strategic fit, as well as a shared approach to investing. We see this strategic partnership as key to our ambition to become a leading Nordic high-yield asset manager."
    Jørgen Beuchert, CEO of NCI Advisory, comments, "We believe that the Nordic debt market will become even more interesting in the future, particularly for experienced, active managers capable of handling complex situations. This strategic partnership marks a significant milestone in NCI Advisory's growth and expansion plans. CrossingBridge brings a wealth of expertise, which complements NCI Advisory's 16-year track record of delivering attractive returns across more than 100 exits. Our partnership establishes a strong foundation for growth and opens opportunities for additional debt investment strategies."
    About NCI Advisory
    NCI Advisory is a Nordic debt asset manager, founded in 2008 and owned by Jørgen Beuchert. NCI Advisory has EUR 100 million under management and operates in the primary and secondary Nordic high-yield bonds and direct loans market. The company's oldest fund has generated an average return of 10.1% since 2008 and paid an average of 9.3% in dividends.
    About CrossingBridge
    CrossingBridge Advisors LLC, founded by David Sherman and owned by ENDI Corp. (OTCQB: ENDI ), has more than USD $2.9 billion under management focusing on Corporate Credit strategies. CrossingBridge has a deep and highly experienced team led by the CEO and majority shareholder, David Sherman .
  • OK, I'm waiting to buy, just need a couple of months to see the risk/reward and volatility.
  • @davidsherman has definitely earned a “buy first, ask questions later” status for potential investors. Maybe this is similar to PIMCO jumping on the mortgage market after the GFC, though obviously a much smaller market, and CrossingBridge will likely exploit their first mover advantages for investors’ benefit.

    “Scandinavia” is an interesting group of countries: Norway is resource rich (both energy and basic materials), and Sweden has NVO and some tech and defense companies. Fidelity has FNORX, the Fidelity Nordic fund, which has performed well long term (and I owned briefly in the past, thinking it would be an energy-heavy fund before drilling into its contents, which I should’ve done before I bought, obviously).
  • FD1000 said:

    OK, I'm waiting to buy, just need a couple of months to see the risk/reward and volatility.

    When is it opening and where is it going to be available- if you happen to know.

  • I don't have any idea.
  • Uh oh. Danes would be offended -- Novo Nordisk is Danish.
  • @sfnative Dang it! Good call. Apologies….I always mess that up. You would think I would remember…..this is why I shouldn’t post too much! Thank you.
  • In response to the discussion board:
    CrossingBridge has commented in investor letters of exposure to the Nordic bond market and reasoning for holding these investments among its strategies.
    Over the next several months, CrossingBridge will prepare a presentation on the Nordic bond market to share.
    In the interim, CrossingBridge continues to invest in the asset class in its strategies.
    As a general rule, foreign currency investments are hedged back to US Dollars.

    For those curious or impatient to learn more, feel free to reach out to [email protected] to set up a call for a discussion on the Nordic debt market.
  • edited July 19

    In response to the discussion board:
    CrossingBridge has commented in investor letters of exposure to the Nordic bond market and reasoning for holding these investments among its strategies.
    Over the next several months, CrossingBridge will prepare a presentation on the Nordic bond market to share.
    In the interim, CrossingBridge continues to invest in the asset class in its strategies.
    As a general rule, foreign currency investments are hedged back to US Dollars.

    For those curious or impatient to learn more, feel free to reach out to [email protected] to set up a call for a discussion on the Nordic debt market.

    Please advise board when this fund begins trading as well as brokerage availability. Calls to John Conner this week - 914-496- 0829- were not returned. Perhaps incorrect # or he is on vacation.
  • Junkster --- eMail: [email protected].
  • As an update, John got your voicemail yesterday, is writing a letter, and will reach out.
  • @David_Snowball,

    Instead of each of us writing to John, can Crossinbridge not post here the same answer to the two questions @Junkster and I asked - when and where?
  • edited July 19
    #

    As an update, John got your voicemail yesterday, is writing a letter, and will reach out.

    Just got off the phone with John Connor. Very informative conversation from investing and the new Nordic fund to hiking. A really sharp guy and a real attribute to the CrossingBridge team.

    They are looking at a launch date of September 30. Availability initially at Pershing and Fidelity. Eventually Schwab as they have more red tape on the listing of new funds. Can also be purchased directly through CrossingBridge.

  • Hi, Balu.

    The shortest answer is that the SEC imposes a "quiet period" while a filing is in registration, and compliance lawyers are incredibly twitchy about putting any words to paper during that time.
  • edited July 19

    Hi, Balu.

    The shortest answer is that the SEC imposes a "quiet period" while a filing is in registration, and compliance lawyers are incredibly twitchy about putting any words to paper during that time.

    No worries. See @Junkster post. IMO, the info sought is not subject to those. It is like potential date for an IPO and the exchange where it might be potentially listed.

    Thanks. @Junkster.
  • I'm going out on a limb here, and making wild assumptions...

    When the launch date is finalized, and probably before the general availability on brokerage sites, it will be available directly from CrossingBridge.

    See the 'FUNDS' menu dropdown at https://crossingbridgefunds.com for an entry.

    And an updated fund application will be available at https://info.crossingbridgefunds.com/hubfs/Applications/Individual_Joint_Application.pdf

    CrossingBridge (and RiverPark for that matter) does not have any on-line account access. The only account access is via PaperMail or telephone to their custodian/agent U.S. Bank NA, Global Fund Services.
  • Do we have a potential date when the fund starts?
  • Since the filing states 9/27, I suspect it may be effective Monday when the market opens. Call or do a test purchase with your brokerage to see if the fund is available,
  • Schwab has it, but with a $49.95 Transaction Fee (of course).
  • Tried placing an order this morning at Schwab where the fund is or will be available. Received a message. “The order cannot be placed”. Then further down “we cannot process your order for this fund. Please contact a Schwab Rep…….”

    I assume order couldn’t be placed because it shows a price (nav) of 0. When it begins trading I assume the offering price will be $10. May contact a rep later today but if anyone already has please elaborate on what was said.
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