A research-focused, actively managed, high yield solution. We seek to exploit inefficiencies in the high yield market and aim to provide clients with consistent excess return potential over the long term.
Our investment believe the leveraged credit market is inefficient market and has cyclical, industry, and company-specific dislocations. These inefficiencies cause valuations to disconnect from fundamentals, providing opportunities for exploitation and monetization.
Disciplined, research-intensive process
- Based on in-depth, bottom-up credit analysis designed to identify securities with mispriced credit and liquidity risk.
Diversified cash bond portfolio
- Focused on liquid US dollar securities rated BB to CCC.
An experienced and stable credit team
- A well-resourced, cohesive team of investment professionals with senior portfolio managers who have a long tenure of working together.
We believe long-term outperformance in corporate credit is most reliably generated by deep proprietary research to identify undervalued securities, and we focus on relative value while maintaining a technology-enhanced approach to risk management.
We leverage the expertise of the broad credit team, with research acting as the gatekeeper to the securities we hold, trading providing relative value and technical opportunities, and portfolio management setting the overall risk profile and positioning the portfolio for the prevailing environment.
Disciplined and time-tested investment approach
Macro assessment
Set the course for the secular trend but navigate intermediate cyclical events
Credit risk allocation
Determine the appropriate sizing of overall credit risk
Relative value
Spread / yield comparison versus industry peers, credit ratings, liquidity, and capital structure
Technical analysis
Deal size, buyer base, index eligibility, demand from foreign and domestic flows
Credit risk factors
Positioning across curve, quality, capital structure, and sector
Security selection
Deep fundamental credit research across the investible universe
For more information about our Credit capabilities
Risks
The value of the portfolio may fall as well as rise, and you may not receive back the amount invested.
Fixed income securities can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer's ability to make interest and principal payments on its debt. This includes prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity at the time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.
Securities in the lowest of the rating categories considered to be investment grade (that is, Baa or BBB) have some speculative characteristics.
High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds.
Liquidity risk is the possibility that securities cannot be readily sold within seven days at approximately the price at which a fund has valued them.
International investments entail risks including fluctuation in currency values, differences in accounting principles, or economic or political instability. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility, lower trading volume, and higher risk of market closures. In many emerging markets, there is substantially less publicly available information, and the available information may be incomplete or misleading. Legal claims are generally more difficult to pursue.
Portfolios may invest in derivatives, which may involve additional expenses and are subject to risk, including the risk that a security or securities index to which the derivative is associated moves in the opposite direction from what the portfolio manager anticipated. Another risk of derivative transactions is the creditworthiness of the counterparty because the transactions rely upon the counterparties’ ability to fulfill their contractual obligations. US Treasury futures are used to manage portfolio duration on a fully covered basis (no leverage is utilized). Total-rate-of-return swaps are utilized as an overlay strategy. Credit default swaps can be used to gain credit exposure, reduce credit exposure, or express a view of convergence between two credits. Currency forwards can be used to tactically increase or reduce the portfolio’s currency risk in a liquid, timely manner during volatile market periods. Interest rate swaps can be used to limit, or manage, the portfolio’s exposure to fluctuations in interest rates. Derivatives used are strictly constrained by client investment policy.
IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.
The disruptions caused by natural disasters, pandemics, or similar events could prevent the strategy from executing advantageous investment decisions in a timely manner and could negatively impact the strategy’s ability to achieve its investment objective and the value of the strategy’s investments.
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