Investment Strategies :: Alternative Credit

Client Login
Contact Us

Alternative Credit:
  Structured Products
  Leveraged Credit Strategies
  Separate Account Management

Alternative Credit

The Alternative Credit Strategies (“ACS”) Group extends McDonnell’s credit research-oriented business into the non-investment grade market. The ACS Group employs a disciplined and consistent process utilizing qualitative and quantitative analysis to identify, measure and classify risk and return.

The investment objective of the ACS Group is to provide investors with differentiated exposure to the leverage finance markets through the execution of the group’s investment philosophy which focuses on creating total return through a systematic approach to the management of credit risk. We seek investments that offer a margin of safety that will protect our investors through various economic, credit and industry cycles. Our aim is to invest in businesses at attractive valuations in various market environments.

The ACS Group’s investment process is based on fundamental credit and economic analysis, risk classification and relative value assessment throughout an issuer’s capital structure. The key to the investment process is the integration of qualitative analysis and quantitative assessment by McDonnell’s portfolio management team. The quantitative framework is built around McDonnell’s Leveraged Credit Assessment Platform (“LCAP”), which provides information monitoring, modeling, scoring and risk management. The purpose of the LCAP system is to provide a framework to consistently measure and identify differences among credits and industries. This is done to augment and enhance the qualitative credit analysis performed by McDonnell’s ACS Group. The LCAP system enables McDonnell to efficiently model, score and monitor various ratios that the ACS Group believes are indicative of credit collateral and capital structure strength. The ultimate objective of the investment process is to seek attractive risk-adjusted returns through disciplined credit evaluation, prudent portfolio diversification, portfolio analysis and proactive trading strategies.

Our ACS Group differentiates itself as a management team with three key attributes:

(1)	Tenure of team working in leveraged credit industry – The team is comprised of a seasoned group of analysts and portfolio managers, some of who have had careers in the loan market since the late 1980’s. Individuals represent highly experienced credit, portfolio management and risk management professionals.
(2)	LCAP System – In our view, the ACS Group has utilized our investment philosophy and LCAP scoring system with exceptional results.
(3)	Structured product expertise – The team has extensive experience managing complex, leveraged structures throughout the credit cycle.

This investment philosophy is executed in three separate strategies representing risk/return propositions: Structured Products, Leveraged Credit Strategies and Separate Account Management.

For additional information pertaining to these strategies, please contact us.