Why Park Avenue Institutional Advisers?
Our High Yield and Leveraged Loan team consists of two portfolio managers with an average of 25 years of portfolio management experience and six industry analysts with an average of over 15 years of investment experience.
The members of the PAIA investment team have successful long-term track records in a broad range of market conditions and asset classes.
We take an active, fundamental analysis approach to investing that starts with rigorous, independent research and integrates risk management into our investment process. We begin with bottom-up research on each security, loan or structured product being considered. We also make ongoing top-down assessments of global and domestic markets, economies and business cycles.
We are disciplined managers who gauge value relative to risk. The strength and depth of our research allows us to invest with conviction in select companies and assets that the team knows thoroughly, while rejecting potential investments that we believe offer inadequate compensation for risk. Our portfolio management team makes tactical adjustments and frequently reviews all portfolio components to determine if our investment thesis is intact.
Research is an ongoing process led by a team of industry analysts who examine the business model, capital structure and management teams in addition to evaluating collateral packages, loan terms, and financial stress tests.
PAIA has a rigorous and comprehensive approach to investment selection that begins with a fundamental, bottom-up analysis of each portfolio candidate followed by an analysis of appropriateness for portfolio construction.
- The analyst team is composed of sector specialists with many years of experience following their respective industries
- Analysts look at the entire capital structure when evaluating an issuer
- Analyst interactions with management at meetings, conferences and company visits are an essential part of the initial and ongoing research process
- New issues are evaluated from the point of view of all participants, including the underwriter, issuer and management
Our team follows a comprehensive approach to investment selection that begins with a fundamental, bottom-up analysis followed by an assessment of the potential investment’s impact on a given portfolio’s risk, diversification, and strategic characteristics. Once an investment is purchased for a portfolio, the investment is monitored and reviewed on an ongoing basis.
The investment process is followed with strict discipline from analysis, to approval, to ongoing monitoring.
- Opportunities are reviewed and updated daily by all participants
- Relative value vs. peers and existing capital structure
- Industry characteristics
- Potential for improvement and vulnerabilities identified
- Impact on portfolio yield
- Impact on portfolio risk profile
Analyst / PM deep dive
- Cash flow modeling and asset coverage analysis
- Discussion with management team
- Review of credit agreements and collateral, if applicable
- Analyst forms expectations for the business and financial profile of the issuer
- Inclusion of review and terms into proprietary portal (earnings reviews, initial assessments, company updates)
- Analyst presents assessment and recommendation to portfolio managers
- Portfolio managers consider whether to proceed
- Credit decisions are subject to the approval of two portfolio managers
Ongoing surveillance and compliance
- Portfolio is monitored for compliance
- Surveillance is continuous and reviews are done quarterly
- Investments not meeting analyst or market expectations may be assigned to a watch list
- In many cases, sales may be authorized by a single portfolio manager