(Bloomberg) -- Taula Capital Management’s Diego Megia is throwing his weight behind the market for EU bonds, despite recent setbacks for the region’s joint-debt issuance program.
The bonds look cheap compared to similarly rated sovereigns, the firm’s chief investment officer said at the Sohn London Investment Conference on Wednesday.
“This is an opportunity for investors,” he said, adding that spreads could narrow by about 40 basis points if the bonds are included in major sovereign bond indexes.
The EU has been lobbying index providers to reclassify the securities as sovereign debt, a move they argue will bolster their appeal. MSCI and ICE have both rejected the proposal, while Bloomberg Index Services Limited is currently considering a reclassification.
Megia, a former Millenium Management senior trader, started his new hedge fund with $5 billion earlier this year. As much as $3 billion of the capital was raised from Millennium to make his firm one of the biggest-ever startups in the world. Taula focuses on macro, fixed-income relative value and inflation-risk trading.
--With assistance from Alice Gledhill.
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