RiverNorth Launches High Income Fund With Oaktree
Designed to Deliver Capital Appreciation and Income
Combines RiverNorth's Closed-End Fund and Oaktree's Senior Loan and High Yield Bond Expertise
CHICAGO, Jan. 17, 2013 /PRNewswire/ -- RiverNorth Capital Management, LLC, a leading investment management firm specializing in opportunistic investment strategies, has launched the RiverNorth/Oaktree High Income Fund (Class I Symbol: RNHIX, Class R Symbol: RNOTX), a new mutual fund focused on total return consisting of long-term capital appreciation and income. The Fund is advised by RiverNorth and is designed to capitalize on market inefficiencies in both closed-end funds and the credit markets. Oaktree Capital Management, L.P., a subsidiary of Oaktree Capital Group, LLC (NYSE: OAK), a leading global investment management firm focused on alternative markets, co-manages the Fund as sub-adviser to RiverNorth.
The Fund provides daily liquidity and allocates its assets among three strategies: a Closed-End Fund Strategy (managed by RiverNorth), a Senior Loan Strategy and a High Yield Bond Strategy (both managed by Oaktree). Combined into a single fund, these three strategies work together to offer investors the potential for attractive yield.
"The RiverNorth/Oaktree High Income Fund provides investors with access to two experienced managers that are proven in their respective strategies, as well as a unique opportunity to potentially benefit from the Fund's high income strategy at a time when investors are hungry for higher yields," said Brian Schmucker, Chief Executive Officer of RiverNorth. "We believe Oaktree's value-oriented and risk-controlled strategies, as well as our flexible and opportunistic approach to closed-end fund investing, will hold tremendous appeal to both advisors and their clients seeking yield and diversification during periods of market volatility."
The allocation between the High Yield Bond and Senior Loan Strategies will be tactically managed based both on market opportunities and the anticipated risk/reward trade-offs between the two asset classes. RiverNorth's Closed-End Fund Strategy has the flexibility to invest across all asset classes represented in the closed-end fund universe.
"We are pleased to partner with RiverNorth, a leader in closed-end fund investing. Through this Fund, individual investors and advisors can access a tactical allocation between Oaktree's Senior Loan and High Yield Strategies that has been available to institutional clients for many years," said Howard Marks, Chairman of Oaktree.
The Fund's portfolio managers are Patrick Galley, Chief Investment Officer, and Stephen O'Neill of RiverNorth, along with Sheldon Stone, Principal, and Desmund Shirazi of Oaktree.
As of December 31, 2012, global high-yield bonds were yielding an average of 6.05 percent, senior loans an average of 5.16 percent, while the average distribution yield of all closed-end funds was 6.45 percent as represented by the BofA Merrill Lynch Global High Yield Constrained Index, the Credit Suisse Leveraged Loan Index and the Morningstar U.S. All Closed-End Fund Index (unweighted), respectively. These asset classes were offering significantly higher average yields than 10-year Treasuries (1.76 percent) and the Barclays Capital U.S. Aggregate Bond Index (1.74 percent) at that time1.
RiverNorth Capital Management, LLC is a leading investment management firm specializing in opportunistic investment strategies including the trading of closed-end funds and volatility. RiverNorth typically favors under-followed, specialty asset classes where the potential to exploit inefficiencies is greatest. RiverNorth serves as the Investment Adviser to RiverNorth Funds and is the General Partner of multiple private investment partnerships.
Headquartered in Chicago, RiverNorth's offices can be reached at (312) 832-1440 or firstname.lastname@example.org.
For additional information, please visit www.rivernorthfunds.com.
Oaktree is a leading global investment management firm focused on alternative markets, with an estimated $81 billion in assets under management as of September 30, 2012. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and listed equities. Headquartered in Los Angeles, the firm has over 700 employees and offices in 13 cities worldwide.
For additional information, please visit www.oaktreecapital.com.
1 BofA Merrill Lynch Global High Yield Constrained Index tracks the performance of below investment grade bonds of corporate issuers domiciled in countries having an investment grade foreign currency long-term debt rating (based on composite of Moody's and S&P). The Index is weighted by outstanding issuance, but constrained such that the percentage of any one issuer may not represent more than 3% of the Index. Credit Suisse Leveraged Loan Index tracks the investable market of the U.S. dollar denominated leveraged loan market. It consists of issues rated "5B" or lower, meaning that the highest rated issues included in this index are Moody's/S&P ratings of Baa1/BB+ or Ba1/BBB+. All loans are funded term loans with a tenor of at least one year and are made by issuers domiciled in developed countries. Closed-end fund statistics are based on the Morningstar U.S. All Closed-End Fund Index (unweighted), which are an un-weighted average of all funds in the index. The Barclays Capital U.S. Aggregate Bond Index is an unmanaged index of investment-grade fixed-rate debt issues with maturities of at least one year. The indices cannot be invested in directly and do not reflect fees and expenses.
You should carefully consider the investment objectives, potential risks, management fees, and charges and expenses of the Fund before investing. The Fund's prospectus contains this and other information about the Fund, and should be read carefully before investing. You may obtain a copy of the Fund's prospectus by calling 1-888-848-7569.
Borrowing Risk– borrowings increase fund expenses and are subject to repayment, possibly at inopportune times. Closed-End Fund Risk – closed-end funds are exchange traded, may trade at a discount to their net asset values and may deploy leverage. Convertible Security Risk – the market value of convertible securities adjusts with interest rates and the value of the underlying stock. Credit Derivatives Risk – the use of credit derivatives is highly specialized, involves default, counterparty and liquidity risks and may not perfectly correlate to the underlying asset or liability being hedged. Currency Risk – foreign currencies will rise or decline relative to the U.S. dollar. Distressed and Defaulted Securities Risk – defaulted securities carry the risk of uncertainty of repayment. Equity Risk – equity securities may experience volatility and the value of equity securities may move in opposite directions from each other and from other equity markets generally. Fixed Income Risk – the market value of fixed income securities adjusts with interest rates and is subject to issuer default. Foreign/Emerging Market Risk – foreign securities may be subject to inefficient or volatile markets, different regulatory regimes or different tax policies. These risks may be enhanced in emerging markets. Floating Interest Rate Risk – loans pay interest based on the London Interbank Offered Rate (LIBOR) and a decline in LIBOR could negatively impact the Fund's return. Investment Style Risk – investment strategies may come in and out of favor with investors and may underperform or outperform at times. Loans Risk – loans may be unrated or rated below investment grade and the pledged collateral may lose value. Secondary trading in loans is not fully-developed and may result in illiquidity. Management Risk – there is no guarantee that the adviser's or sub-adviser's investment decisions will produce the desired results. Market Risk – economic conditions, interest rates and political events may affect the securities markets. New Fund Risk – there can be no assurance that the Fund will grow to, or maintain an economically viable size. Portfolio Turnover Risk – increased portfolio turnover results in higher brokerage expenses and may impact the tax status of distributions. Preferred Stock Risk – preferred stocks generally pay dividends, but may be less liquid than common stocks, have less priority than debt instruments and may be subject to redemption by the issuer. Security Risk – value of the Fund may increase or decrease in response to the prospects of the issuers of securities and loans held in the Fund. Swap Risk – swap agreements are subject to counterparty default risk and may not perform as intended. Underlying Fund Risk – underlying funds have additional fees, may utilize leverage, may not correlate to an intended index and may trade at a discount to their net asset values. Valuation Risk – Loans and fixed-income securities are traded "over the counter" and because there is no centralized information regarding trading, the valuation of loans and fixed-income securities may vary.
The Fund is distributed by ALPS Distributors, Inc. Member FINRA.
ALPS Distributors, Inc. is not affiliated with RiverNorth Capital Management, LLC or Oaktree Capital Group, LLC
SOURCE RiverNorth Capital Management, LLC