The credit dislocation fund aims to target attractive absolute returns by investing in credit instruments whose market prices have temporarily decoupled from fundamentals. Astra expects such dislocations to occur in three key areas of the broader credit market over the coming 9-12 months: corporate credit, residential and commercial real estate.
Recent shifts in the global monetary policy regime (e.g. a sharp increase in rates; QT), policy missteps, geopolitical uncertainties and macro-economic headwinds are factors that could lead to significant price volatility in sectors with sound credit fundamentals – the LDI crisis provides an example of a dislocated AAA CLO market triggered by rising rates and falling Gilt prices. The dislocation opportunity will focus on investments with relatively swift expected reversion to the mean. Astra is well positioned to take advantage of these situations across different market segments.