We believe in taking a carefully selected approach to high yield corporate debt. We build a portfolio of companies deliberately chosen for their fundamental strength and ability to repay debt. Our strict credit standards mean few bonds make it into our portfolio.
We aim to be risk managers first and foremost. In doing so, we evaluate each issuer with respect to many areas of risk including business risk, financial risk, and sustainability risk. We target strong businesses and work to understand a company’s defensive characteristics; its capital structure; environmental, social, and governance (ESG) practices; and its ability/incentives to repay debt in the case of difficult economic turbulence. By placing an emphasis on a comprehensive assessment of credit quality within the high yield debt universe, we focus on identifying and taking advantage of mispricings in high yield that are overlooked, misunderstood, or mis-rated.
We view sustainability factors as credit factors that contribute to an issuer’s creditworthiness, competitive advantage, and staying power. We believe integrating ESG factors into our credit research further mitigates credit risk, resulting in a profile focused on capital preservation and delivering attractive risk-adjusted total returns over time. In doing so, we provide a portfolio that can serve both traditional and sustainable mandates without requiring investors to choose between performance or progress.