Principal Asset Management has launched the Finisterre Emerging Markets Debt High Income Fund offering investors access to an income-focused emerging markets debt strategy spanning sovereign, corporate and local currency bonds.
The fund, managed by Principal Finisterre, a boutique firm owned by Principal Asset Management, is seeded with $100 million. It is led by Damien Buchet, chief investment officer of Principal Finisterre, alongside senior portfolio manager Christopher Watson.
The fund is built on an internal framework assessing assets based on performance, liquidity and volatility characteristics. The strategy targets annualised volatility of 3-5% and typically maintains portfolio duration in the three-to-four-year range
The fund adopts a long-biased approach, using macroeconomic and credit research to guide country and security selection. According to Principal Asset Management, the portfolio emphasises diversified income sources and moderate duration exposure rather than attempting to time markets or actively manage drawdowns.
The high-conviction portfolio generally holds between 100 and 150 issuers and combines diversification with thematic investment ideas linked to sector and macroeconomic trends.
“Investors are increasingly focused on the durability and reliability of income as volatility persists across rates, currencies and risk assets,” said Damien Buchet, CIO of Principal Finisterre. “Emerging market debt remains one of the few areas offering genuinely attractive yields, but dispersion across countries and issuers is widening, making selectivity and research critical.”
