Josh Friedman, one of the co-founders of Canyon, was on Capital Allocators recently.
He’s one of the Drexel diaspora, of particular interest to me right now as a I re-read the book Den of Thieves. In the podcast he goes over some of the mistakes made in setting up an alternatives firm and the differences in his path vs. some of today’s mega-cap alternatives firms. Of note, it was interesting hearing him outline how he had many of the investing strategies that others had (e.g., risk arb, distressed, high yield, etc.), but co-mingled them rather than keeping them as separate products – which made it much harder for potential limited partners to allocate to them.
Separately, he discussed opportunities in today’s market from a credit investor’s point of view. A few notables he pointed out included fixed rate liquid credit and lower rated tranches of unsecured consumer loans. He outlined that while lower grade fixed rate bonds have declined rapidly in price, and should represent some measure of value today – investors that hold them often dump them because they have declined in price. Therefore the forced selling is pushing certain fixed rate bonds into highly investable opportunities. He also outlined that consumer unsecured loans, specifically those related to home improvement and at the lower end of the securitized tranches, have gapped out about 4x (on a spread basis), representing a wholesale major repricing in return expectations.
All told, it was an interesting interview that was an easy listen and I recommend it.