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Advent in the Press

  • Convertible arbitrage offers compelling returns and diversification benefits, yet investors have turned their backs on the strategy for all the wrong reasons, according to Advent Capital Management.

  • Video

    Nov. 26 (Bloomberg) -- Advent Capital Management CEO Tracy Maitland talks about convertible bonds and his investment strategy. He speaks on Bloomberg Television's "Market Makers." (Source: Bloomberg)

  • "Convertibles are a great way for investors to play a rebound in some out-of-favor companies and collect some income along the way. They offer a highly attractive alternative to the common stock," says David Hulme, a managing director at Advent Capital Management.

  • Tracy Maitland is a man on a mission.  And, like a lot of missionaries, he's preaching a gospel, one that sounds a lot like "conversion."  Only it's not quite that.  Maitland's gospel is "convertible."  The president and founder of 16-year old Advent Capital Management evangelizes on behalf of his favorite security-convertible bonds.  There's work to be done: Convertibles are "very much an overlooked asset class," he says.

  • The value of new issuances is on pace to show year-over-year growth for the first time in four years, based on data through March from UBS and Thomson Reuters. The pickup in activity during the first quarter of 2011 was especially significant in the U.S., where the level of new issuances reached $13.5 billion, more than double the level seen in the first quarter of 2010.

  • Arbitrageurs meet new opportunities as convertible products evolve and traditional investors settle back in the market.

  • Big investors looking for protection against rises in interest rates have stoked demand for convertible bonds, with global issuance rising sharply and putting the market on course for its best year since 2008.

    Companies last week sold $9.4bn of convertible bonds, debt which can be exchanged for equity at a pre-agreed price trigger, according to data from Dealogic.

    These figures marked the strongest week of issuance since May 2008 and included the year’s two largest single issues, from MetLife, the US insurer, and Sinopec, the Chinese oil company.

  • General Motors roared back into the stock market last week just 16 months after emerging from bankruptcy, but the $15.8 billion initial public offering proved less popular with investors than many had expected. Still, that was far better than another IPO did; Harrah's Entertainment pulled its scheduled offering.

  • Interview with David Hulme, Portfolio Manager of the Advent/Oyster Global Convertibles Fund. Link to Video

  • "The downside risk if the stock falls to zero, is typically the fixed income yield, said Advent Capital Management chief investment officer Tracy Maitland.

     

    The New York-based convertible bond manager said pension funds haven't traditionally looked at these securities but he added that interest has started to pick up. He said anecdotally, the number of conversations he's had with pension funds has increased five to 10-fold over the past year."