Active management of corporate bonds, also known as credits, offers a lot of added value as the credit market is relatively inefficient. This means that it will often take some time before information about a company’s credit profile is reflected in the price. This can be attributed to the lesser degree of transparency and liquidity in this market. In addition, the opinion of rating agencies and the positioning of investors are influencing factors.
“Turning our ideas into your performance”Alain van der Heijden
We use both a top-down and a bottom-up approach. Our top-down analysis focuses on major trends and themes in the credit market and on the direction in which the credit market is headed. Bottom-up analysis establishes companies’ credit quality and the way in which this credit quality develops. We add value to the portfolio by investing in companies whose improvement in credit profile is not yet reflected in the spreads. At the same time, this analysis enables us to detect deteriorating credits at an early stage and thus to limit downward risk.
The management team consists of eight experienced credit investors, each of whom is responsible for one or more sectors. Proposals for companies a team member wishes to either invest in or to remove from the portfolio are assessed by an investment committee that consists of three colleagues within the team. Through our analysis and intensive cooperation, we construct a balanced portfolio that is the reflection of the team’s best ideas.