Management & Investment Process

Management

The investment team leverages high degrees of experience and knowledge within a disciplined investment process. Learn more about the Team.
  • Bryan C. Krug, CFA
  • Portfolio Manager
  • 18Years Investment
    Experience

Investment Process

The investment team seeks to generate appealing risk-adjusted returns, investing along the corporate capital structure in bonds, loans and other securities of leveraged corporate issuers. The team’s aim is to take advantage of the illiquidity premium and the asymmetric risk profile in credit investments.

Business Quality

  • Qualitative industry analysis
  • Evaluate business model resiliency using Porter’s 5 Forces
  • Examine management decision-making history

Financial Strength & Flexibility

  • Free cash flow analysis
  • Corporate structure review
  • Capital structure review

Downside Analysis

  • Conservative financial projections
  • Competitive dynamics
  • Capital structure position
  • Enterprise value support

Value Identification

  • Credit improvement opportunities
  • Relative value within the capital structure
  • Credit cycle awareness
  • Catalysts with optionality
  • Dislocation exploitation

Other Strategies Managed

Fixed income securities carry interest rate risk and credit risk for both the issuer and counterparty and investors may lose principal value. In general, when interest rates rise, fixed income values fall. High income securities (junk bonds) are speculative, experience greater price volatility and have a higher degree of credit and liquidity risk than bonds with a higher credit rating. The portfolio typically invests a significant portion of its assets in lower-rated high income securities (e.g., CCC). Loans carry risks including insolvency of the borrower, lending bank or other intermediary. Loans may be secured, unsecured, or not fully collateralized, trade infrequently, experience delayed settlement, and be subject to resale restrictions. Private placement and restricted securities may not be easily sold due to resale restrictions and are more difficult to value.  The portfolio’s use of derivative instruments may create additional leverage and involve risks different from, or greater than, the risks associated with investing in more traditional investments.  International investments involve special risks, including currency fluctuation, lower liquidity, different accounting methods and economic and political systems, and higher transaction costs. These risks typically are greater in emerging markets.  These risks, among others, are further described in Artisan Partners Form ADV, which is available upon request.