Investment Process

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The strategy seeks to exploit inefficiencies in the middle market and lower-tier segments of the high yield market and has the flexibility to invest across the capital structure of an issuer. Bridgefield aims to identify mis-priced credit risk and construct a portfolio with a significant yield advantage relative to the applicable benchmark.

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Bottom-Up Fundamental Research

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• Analyze entire company, not just an individual bond/loan tranche

• 360-degree view of business – customers, suppliers, competitors

• Identify sustainable competitive advantages

 

Cash Flow

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• Understand how a target company generates cash

• Assess durability and sustainability of cash flow​

 

Minimize Credit Losses

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• Calculate and continuously monitor company’s total enterprise value

• Focus on loan-to-value and cash flow

• Only invest in securities with appropriate margin of safety

• ESG factors evaluated for each investment

 

Legal Protections

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• Understand contractual protections in debt agreements

• Assess "waterfall of value" and downside scenarios​

 

Portfolio Construction

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• Security selection drives performance

• No macro bets or themes

• Construct concentrated portfolios – overweight high confidence positions

• Flexibility to invest across the capital structure - bonds and bank loans

• Long-term investment horizon

• Limited exposure to stressed/distressed securities

• Monitor to provide for appropriate diversification and liquidity