Threadneedle taps demand for EM company debt

* Fund shifts strategy from sovereign to corporate focus#

* Will be managed by team drawn from credit and EM

LONDON, April 13 (Reuters) - UK fund house Threadneedle is tapping the increased appetite for emerging market corporate debt from yield-hungry investors with a shift in investment mandate for its Emerging Markets Low Duration fund.

Previously focused on emerging market (EM) government debt, the fund has been renamed the Emerging Market Corporate Bonds fund, and will now invest mainly in debt issued by emerging market companies and companies which conduct a significant part of their business in emerging markets.

The strategy will employ a bottom-up approach, with a company-specific investment style rather than country specific, a spokewoman said.

Fund firms have begun to launch pure EM corporate debt funds this year as growth in issuance has helped ease concerns about liquidity and lack of depth. [ID:nLDE6071JC] Investors hungry for yield also appreciate that EM corporates are likely to deliver better returns than more mature Western markets.

The new fund will be managed by a team drawn from Threadneedle's emerging market, investment grade and high yield credit teams, headed by Richard House, head of EM debt.

Threadneedle -- owned by Ameriprise Financial (AMP.N) -- took over the original fund in 2009 via its acquisition of Standard Chartered Bank's (STAN.L) World Express investment funds business, it said.

House said that the emerging market corporate debt market is likely to grow significantly over the next few years and offers a significant yield pick up over sovereign debt.

"Emerging market fundamentals, particularly sovereign balance sheets, have never been stronger," he said. "This has driven the structural reduction of the risk premium associated with investing in external sovereign debt. As emerging market economies mature, the corporate bond market will develop further in order to finance the growing domestic consumer base."

Threadneedle has 8 billion pounds ($12.29 billion) under management in emerging markets and over 60 billion pounds in total. ($1=.6511 Pound) (Editing by Simon Jessop)