Risk Management

Our philosophy is based on exploiting inefficiencies across credit markets that develop for several reasons. First, rating agencies are slow to act and narrow in their methodology. Next, investors focus on benchmarks rather than more appropriate measures of risk. Finally, behavioural biases like overconfidence, herd behaviour, clientele effects, and regret lead investors to make sub-optimal investment decisions.

Based on these beliefs, we believe consistent long-term outperformance can be generated by combining the following:

  1. Responsive, broad viewing bottom-up fundamental credit research (integrated through the ION system)
  2. Portfolio construction that acknowledges all the key drivers of risk into a portfolio, looking to balance returns with tail risk
  3. Either a benchmark unaware approach that creates a flexible but
  4. Complete universe or an index that reflects client’s true risk profile / liabilities