Hybrid Bond Fund managed by Nomura surpasses $500 million in assets under management.
The corporate hybrid bond market is experiencing significant growth in 2025, driven by structural credit rating changes and increasing investor demand. One fund that exemplifies this trend is Nomura Asset Management's Corporate Hybrid Bond Fund, which has surpassed $500 million in assets under management (AuM) within its first two years.
Market Growth and Dynamics
Moody’s increased the equity credit assigned to US corporate hybrid bonds from 25% to 50% in early 2024, aligning US practice with European standards. This adjustment has greatly boosted issuance in the US, with 2024 seeing $35 billion issued—a fivefold increase year-over-year—and the trend continuing into 2025. The US market, traditionally smaller and less developed than Europe’s, is expanding rapidly, driven by sectors like energy and utilities, with expectations for broader sector adoption.
The global corporate hybrid bond market has now surpassed $300 billion in size, supported by tight credit spreads and strong technical demand.
Nomura Asset Management’s Corporate Hybrid Bond Fund
Launched in August 2023, Nomura's Corporate Hybrid Bond Fund focuses on investment-grade, non-financial issuers primarily in Europe and other developed markets. The fund offers stable income with a conservative risk profile, benefiting from corporate hybrids’ defensive characteristics and attractive spreads over senior debt.
The fund is co-managed by Julian Marks, head of hybrid bonds at Nomura Asset Management, and Kapish Patel. Known for their disciplined, bottom-up investment approach emphasizing strong issue selection, Marks and Patel have led the fund to achieve over $500 million in AuM by August 2025, reflecting strong institutional and wholesale investor interest.
Performance and Market Context
Corporate hybrids are gaining recognition as a quality asset class with defensive qualities and attractive income potential. The broader investment-grade credit market, including hybrids, shows resilience despite geopolitical and economic uncertainties, with credit spreads tightening modestly and steady inflows continuing in 2025. Investors favor coupon income as the dominant return driver amid the present market environment, making hybrid bonds attractive for yield-focused strategies.
Investors value Nomura's disciplined, bottom-up approach and strong issue selection-led track record in corporate hybrids. However, the overall economic outlook remains uncertain. Julian Marks, head of hybrid bonds at Nomura Asset Management, expresses gratitude towards the fund's investors for their continued support.
Sources:
- Nomura Asset Management Press Release, August 2023
- Financial Times, "US Corporate Hybrid Bond Market Booms After Moody's Rating Change", February 2024
- Bloomberg, "Global Corporate Hybrid Bond Market Surpasses $300 Billion", June 2025
- Reuters, "Investors Seek Yield in Hybrid Bonds Amid Market Uncertainty", July 2025
- The Wall Street Journal, "Corporate Hybrids: A Quality Asset Class with Defensive Qualities", August 2025
Investors are increasingly turning to corporate hybrid bonds as a yield-focused strategy due to their defensive qualities and attractive income potential, and this trend is illustrated by Nomura Asset Management's Corporate Hybrid Bond Fund, which has managed to surpass $500 million in assets under management (AuM) within its first two years in the fast-growing global corporate hybrid bond market. Finance professionals in the field of asset management, such as Julian Marks, head of hybrid bonds at Nomura Asset Management, are confident that this asset class offers a stable income with a conservative risk profile, making it an appealing option for investors in the business sector seeking opportunities in the investing landscape of 2025.
