"So you're the biggest bond investor in the world, pitching my pension fund on a credit play that generates 15%+ returns. How are you able to manufacture those yields? Please explain it to me like I'm seven."
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1. No forced selling:
Our CLOs use long-term, non-mark-to-market financing, so volatility doesn’t push us out of positions.
2. Discounted purchasing:
When the market sells off, we buy loans at discounts and build par, which strengthens the portfolio instead of hurting it.
3. Active management:
We move early when credit weakens.
4. Big team of experts:
We have a large analyst team and deep credit platform that help us spot risks before others do.
5. Diversification:
Our portfolios are diversified and built with structural protections that limit exposure to weaker credits.
6. Alignment:
We invest significant equity alongside our partners, so we manage risk the same way we would with our own capital.
7. Floating vs. floating:
Our assets and liabilities both float, which reduces interest-rate risk and helps keep performance stable.
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"So you're basically better at dodging credit problems than others?"
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I'm so glad you asked. As this chart shows, we've far outperformed credit loss benchmarks.
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"But the chart only goes back to 2021."
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[crickets]
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