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      • Volatility Creates High Yield Opportunity

        18 March 2020   |  

        Escalating concern around the containment of COVID-19 and its impact on global economic growth has sparked an aggressive turn in risk sentiment over the last few weeks. The selloff in noninvestment grade markets has been unprecedented in terms of speed and severity. The repricing of risk has resulted in high yield spreads moving from under 400bps to more than 900bps in just 4 weeks (Exhibit 1). For context, it took 11 months during the 2008 recession for spreads to cross the same threshold, and more than 28 months during the 2000 downturn.

      • Finding Value Across the Capital Structure

        31 October 2019   |  

        One of my fundamental beliefs about investing in credit markets is it’s possible to find the best risk-adjusted return opportunities through fundamental credit analysis and value identification across the capital structure—flexing between high yield bonds and bank loans. I take a value investor’s approach to the below-investment grade market to look for opportunities tied to dislocation and mispricing.

      • Identifying Value Amid a Shifting Rates Outlook

        12 September 2019   |  

        Founding portfolio manager Bryan Krug discusses where he’s finding opportunities in the high yield market given the recent move in interest rates. 

      • Credit at a Crossroads

        31 December 2019   |  

        Market volatility at the end of 2018 understandably tipped off an array of analysis—from whether it marked a larger turn in the economic cycle and the market to whether it increased the attractiveness of some investing opportunities. And if the latter, where those opportunities might lie. We believe that despite some signs of economic softening, the broader economic and market cycle are likely not over. Further, volatility has indeed introduced new compelling investing opportunities—though likely not where many would first look.

      • Late-Cycle Credit Investing

        30 September 2018   |  

        There appears to be growing anxiety among investors that the current credit cycle, now more than 10 years old, is nearing old age and susceptible to a downturn. The implications for high yield credit investors is obvious, as the end of credit cycles tends to coincide with a marked uptick in corporate defaults and asset price corrections.

        While we’re mindful we’re closer to the end of the current cycle than the beginning, we see no near-term catalyst to suggest high yield markets are approaching an inflection point.