DEBT FUNDS

Unifi High Yield Fund

Objective

Unifi High Yield Fund (HYF) is a discretionary fund focusing on event arbitrage and fixed income investment opportunities in capital markets with an endeavour to generate net post tax returns of 3% p.a over the rate of core inflation. The objective is to consistently generate superior compounded annual returns than conventional fixed income instruments with uncompromising emphasis on capital preservation.

Strategy

Unifi HYF’s core investment strategy is to diligently find the pockets of opportunity that are constantly created by the ebb and flow of economic trends, corporate actions, and human emotion. We closely monitor a wide range of asset classes and devise simple methods to continually access the market’s evolving opportunities, always mindful of probable scenarios that could surprise us. Typically, the majority of the portfolio is invested in meticulously evaluated fixed income instruments that form a bedrock providing stable yields without considerable market volatility. The balance part is opportunistically invested in event arbitrage, structured high yield credit, and very selective directional deals to enhance the overall returns to the desired level.

Event Arbitrage Opportunities emerge from corporate events like mergers, acquisitions, buybacks, regulation triggered/voluntary open offers made to the public by controlling shareholders, company delisting, declaration of special dividends, etc. The risk-return pay-off in most of such deals is deal-specific and has limited correlation to market cycles.

Nominal and High Yield Debt - The focus is on opportunities in the AA to Investment Grade segment to optimise after tax yields while balancing risks. Typically, all debt investments are made with a Hold to Maturity (HTM) mindset but some of it could be traded opportunistically to maximise capital appreciation or minimise risk.

Structure

Unifi High Yield Fund is a SEBI registered Category III Alternative Investment Fund incorporated in the form of a trust. It is a privately pooled investment vehicle with a defined investment policy and is supervised by independent trustees. HDFC Bank Limited is the independent custodian and fund accountant. The fund is open ended with a monthly window for subscription and redemption.