Gundlach, RiverNorth Launch Fixed-Income Fund

Apr 19 2011 | 11:52am ET

Hedge fund DoubleLine Capital has launched its second vehicle, a joint-venture with RiverNorth Capital Management.

The RiverNorth DoubleLine Strategic Income Fund debuted in December. Three-quarters of the fund's assets will be managed by DoubleLine or by its founder, former TCW Group chief investment officer Jeffrey Gundlach.

To be precise, Gundlach manages the fund's core fixed-income portfolio, currently about half of the portfolio but to be treated as "dry powder" for the fund's other two portfolios. A quarter of the fund, the opportunistic portfolio, is allocated to DoubleLine's mortgage-backed securities strategy, with the final quarter allocated to RiverNorth, which focuses on discount spreads available in closed-end fixed-income funds.

"The fund is designed to capitalize on market inefficiencies in both closed-end funds and the fixed-income markets in partnership with one of the best fixed-income managers in the business," Patrick Galley, CIO of RiverNorth, told InvestmentNews.

The fund is targeting a 6% annual yield after expenses.


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