Aristea Financial Capital is a UCITS fund focused on the market for subordinated bonds issued by European banks and insurance companies.
It is a solution designed to capture the return potential of a strategic and growing segment through professional and specialised management.
OVERVIEW
Aristea SICAV Financial Capital was established to provide access to a high-potential investable universe: European financial subordinated bonds — instruments that today play a central role in the capital structure of banking and insurance institutions.
Through active and specialised management, the fund selects complex yet rewarding instruments, leveraging market inefficiencies and regulatory constraints that typically limit access for retail investors.
Its approach is based on a thorough analysis of issuers, applicable regulations, and individual prospectuses, with the goal of building a diversified and resilient portfolio capable of balancing return and risk, even during periods of high volatility.
STRATEGY AND OBJECTIVES
Technical Expertise and Active Selection to Navigate a Challenging Market
The fund primarily focuses on:
- Lower Tier 2 (LT2): subordinated debt that ranks below senior bonds in repayment priority but above riskier instruments.
- Additional Tier 1 (AT1) and Restricted Tier 1 (RT1): hybrid instruments (such as CoCos – contingent convertible bonds) issued by banks and insurance companies, designed to absorb losses in the event of financial stress; in terms of risk, they are closer to equity capital.
The management methodology applies rigorous diversification criteria by issuer and geographical area, following a bottom-up selection process based on in-depth analysis of:
- the financial soundness of institutions;
- the historical behavior of bonds and rating agencies;
- the evolution of European regulations and supervisory frameworks.
This investment is suitable for investors with a medium-to long-term horizon, who are aware of the complex nature of financial subordinated instruments and able to tolerate portfolio fluctuations. The main risks involve credit risk — the possibility that one or more issuers may fail to meet their payment obligations (default risk) — and conversion risk related to CoCo instruments, which may be converted into shares or have their nominal value reduced in specific circumstances (trigger events).
The fund’s main objective is to provide selective and professional exposure to the financial subordinated bond market, offering an attractive return potential with a risk profile suitable for sophisticated retail investors under MiFID.
