Investment Grade

Five years ago we launched a simple strategy with a complicated name. The goal sounded simple: to return 2.5% more than cash, after fees, from a long-only, unlevered credit fund. And to do that with as little volatility as possible (but never being allowed to have more than 3% volatility).

The clear opportunity within IG credit from our perspective, without having to take excessive risk, is to buy legacy Bank and Insurance IG debt.

Partner and Portfolio Manager Chris Bowie discusses Q2 performance for the Outcome Driven strategy and provides his outlook for the rest of 2020.

Partner and Portfolio Manager Chris Bowie provides an update on investment grade credit markets.

Q1 2020, or more specifically March 2020, will go down in history as a game changer.

Q1 2020, or more specifically March 2020, will go down in history as a game changer.

These are clearly unprecedented times. We are seeing large gaps down in asset values, large liquidity preference and sometimes positive correlations between risk assets and risk-off hedges.

Chris Bowie outlines the highlights and lowlights for the fund, the successes and challenges, the triumphs and the odd sleepless night.

Chris Bowie looks at the performance of the Outcome Driven strategy over the last quarter and provides his outlook for 2020.

September new issuance has opened with a bang as we expected. Volumes are high and the issuer types are diverse, with a slant towards more frequent borrowers who tend to have their ducks permanently lined up in order to jump on favourable conditions. We expect this trend to continue throughout September as bankers push borrowers to take advantage of what could be one of the best opportunities they might see this cycle.

For fixed income investors, it has been impossible to ignore the proliferation of press coverage about the growth of the triple-B rated corporate bond market, and a coming wave of downgrades for companies rated BBB to high yield, with these ‘fallen angels’ exposing investors to mark-to-market losses at best, and defaults at worst.

In January 2015, after years of market share erosion and leverage increases, Tesco bonds were downgraded to junk status by Moody’s and S&P, forcing all of Tesco’s debt stack out of IG corporate bond indices in the process.