Key Investment Themes

At this stage of the interest rate and credit cycles we belive the focus should be on capital preservation rather than yield. Hence, we prefer asset classes which have the following features:

• High degree of certainty around coupon payments and return of principal.
• Preference for senior, secured investments due to their defensive qualities, being top of the capital structure.
• Floating rate assets, or short dated fixed coupon instruments to guard against interest rate rises.
• Tractable assets, by which we mean assets that are capable of being analysed in a coherent fashion, such that there will be a high level of confidence in the results of the analysis.
• Assets with a low exposure to "bail-in" risk.

In addition, we also like assets of the following type:

• Certain opportunities stemming from various structural changes in the markeplace that offer elevated prospective returns for the risks being taken.
• Selected low volatility absolute return strategies.