We seek to provide highly customized private placement solutions characterized by enhanced yield, superior loss experience, and diversification relative to public investment grade bonds. We access the broad US private placement (USPP) investment universe, including corporates, infrastructure, and specialized credit.
Our investment philosophy is universal across our fixed income strategies and can be expressed through three major pillars:
Corporate debt investments have an asymmetric return profile, with long-term returns consisting entirely of income. We believe a strategy that maximizes income while limiting realized and mark-to-market losses will generally outperform for both public and private debt.
Private placement issues are frequently mispriced relative to public peers. We source value by exploiting price differentials between investment grade private and public bonds driven by liquidity premiums, flexibility premiums, complexity premiums, and general pricing dislocations caused by bond market segmentation.
We believe that a systematic identification of these relative value opportunities coupled with an underwriting process grounded in fundamental credit and structure analysis can capture this yield premium without sacrificing downside protection, generally leading to outperformance over the full market cycle.
Independent
- As an independent tier 1 USPP manager, we have true alignment of interest and a greater ability to customize solutions.
Deployment capability
- With additional bid capacity, deployment is scalable, enabling us to procure bonds without diluting clients or having to select less favourable transactions.
An experienced, well-resourced team
- Dedicated, experienced, and well-resourced USPP team with diverse credit backgrounds.
The team follows a clear and methodical investment process underpinned by in-depth fundamental research:
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.
Diversification may not protect against market risk.
Securities in the lowest of the rating categories considered to be investment grade (that is, Moody’s Baa or S&P BBB) have some speculative characteristics.
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.
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.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis, and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and can be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Strategy’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries. These disruptions 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. Any such event(s) could have a significant adverse impact on the value and risk profile of the Strategy.
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