How We Invest

Our approach to the credit markets and fixed income investing is premised on the understanding that we are responsible for more than just selecting bonds and debt securities - our investors count on us to protect their holdings and to generate income. As fixed income managers, we are lending the capital of our investors.  Our lending approach is to work with high quality obligors that understand the importance of debt in their capital structure and the value of solid cash-flow generating assets.

We prioritize our investment objectives as follows:

1. Principal protection
2. Dependable income
3. Enhanced returns

We carefully build portfolios with obligors that have strong asset and cash flow support to ensure full repayment of our principal amount.  By lending only to those obligors whose balance sheet we can evaluate and whose debt servicing capacity we can understand through full transparency in our research, we can provide reliable income for our clients.  And by employing a diversification strategy based on minimizing the correlation between various sources of strong risk-adjusted returns in the market, we aim to outperform our benchmarks and our peers.

How We Manage

All of our fixed income strategies are designed to maximize risk-adjusted returns and preserve capital throughout the credit cycle.

In selecting investments for our portfolios, we undergo a fundamental top-down analysis of economic, political and market trends in order to identify sector trends, credit cycle positioning, cash flow trends and forecasts for both the yield curve and the credit curve.  Further, bottom-up fundamentals are reviewed to assess an obligors ability to generate cash and to meet interest and principal obligations on its debt.  At the company level, we focus on industry position, operating leverage, management strength and experience, historical earnings and future projections, liquidity profile and capital structure positioning - we like logs of other capital below us.  Asset-backed and structured credits are evaluated based on the strength of the collateral and we look for underlying debt that is well documented and carefully originated.

Risk management is an important part of Marquest’s investment process.  By identifying the potential risks, such as liquidity, interest rate, credit, and currency, and by using investment tools available to mitigate these risks, we seek to maximize returns on a risk-adjusted basis.

The ultimate goal for each of our fixed income portfolios is to identify investments carrying limited risk to principal across diversified industry sectors and product sets, with superior risk premiums to benchmarks.