ValueWalk attended IRA Sohn Conference in Toronto Aka Capitalize For Kids which took place October 26th-27th and featured an all star line up. has some extensive notes from the conference. Readers can find our rough notes below. We have more upcoming conferences so stay tuned for coverage.

Also see

NOTE: The full file with slides which explain the text can be found at the bottom of this post. Also, Dan Loeb’s presentation was off the record so we have nothing on that panel.

IRA Sohn Conference – Credit Panel

Ted Goldthorpe – Former CIO of Apollo Investment Corporation

Nat Zilkha – KKR & Co.

Jonathan Lewinsohn – Centerbridge

  • The asset origination market is big. This is one way to earn decent returns in a fixed income environment where solid trading opportunities are more scarce than they were before the crisis, as a result of low inventories
  • Lower quality is expensive. As such, credit investors are “moving towards senior tranches”
  • Even so, the non-investment grade space amounts to $2 trillion. So there are still some opportunities
  • In an expensive market there an increased focus on exists vs entries. Timing is important and there many chances to get it right since “foreign investors are searching for yield”
  • Unrated products are hard to invest in because of mandates, etc. As such, we are seeing an increase in aggregation – packaging unrated products into rated structures
  • Despite lessons learned (or not) from the crisis, there is still a duration mismatch between assets < liabilities
  • With rates so low, duration risk is exceptionally high
  • It is easier to find opportunities with less capital. A larger capital base makes certain trades impossible due to limited supply and liquidity, etc.
  • Commodity cycles are long because of how much capital is involved in the upswings
  • Public information on energy companies is not reliable since they choose to present the best wells, etc.

Places to look:


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