Global Premier Credit Strategy
|
The team contends that high-quality businesses, with strong franchise value, low likelihood of default, and low expected spread volatility over the business cycle often have:
- Dominant franchises
- Relative non-cyclicality
- Low capital intensity
- Strong balance sheets with high, stable free cash flow
- Low levels of business risk across diversified business lines
- High barriers to entry and limited displacement risk
Customization: |
|
The team delivers fixed income expertise in a customized, solutions-based approach that optimizes the application of the team's global resources to the investment objectives of the individual client. The team is client-centric in all aspects of the relationship. |
Right-Sized: |
|
As a mid-sized asset manager, the team has the depth and breadth of resources to provide our clients with options ranging from highly customized strategies to standardized fund options. The team benefits from a collaborative structure based on small team of sector specialists enabling the team to confidently implement investment themes across portfolios. |
Extensive Resources of a Global Firm: |
|
Morgan Stanley Investment Management has a cohesive team of fixed income specialists in New York, London, Singapore and Tokyo who can identify opportunities to capture returns in all major markets worldwide. They bring together an impressive range of market experience, intellectual rigour and academic achievements. |
Intensive Risk Management: |
|
At the strategy level, the team integrates daily monitoring that ensures compliance with guidelines and quantifies portfolio risk exposures. At the firm level, the risk management team operates independently of the business functions. |
| 1 | Screening: |
|
The team uses quantitative tools and signals to complement their fundamental research and enhance their process. An example of this is the use of Moody’s Credit Edge, an industry leading Merton-based structural model. The output offers the ability to to screen and compare credits, model events and monitor portfolio risk. |
|
| 2 | Credit analysis: |
|
The team focuses on financial risk, business risk and management ability/intentions. When alanlyzing business risk, they assesses a company's competitive position, its diversification and growth potential, the value of its franchise and the flexibility of its business model in terms of the variability of its cost structure. Financial risk involves an examination of a company's financial statements to assess the suitability of the company's capital structure for the risk entailed in its business. The team's forward-looking proprietary cash flow models enable them to understand the likely future financial profile. The group also seeks to understand management's intentions, in terms of business development and capital structure, and ability to execute. |
|
| 3 | Portfolio Construction: |
|
A portfolio of approximately 60 to 90 issuers is constructed, with sector allocation driven primarily from bottom-up security selection (subject to the team’s risk management guidelines). Integral to the team’s portfolio construction process is the measurement and monitoring of market risk, duration and volatility, and credit risk through the use of proprietary risk measures and proprietary models. |
Effective 16 December 2022, Dipen Patel and Stella Ma were added as Portfolio Managers on the Strategy and Chris Roth is no longer serving as Portfolio Manager on the Strategy.
Effective 30 August 2024, Richard Ford is no longer serving as Portfolio Manager on the Portfolio.