Investing with a Catalyst: Special Situations and Event Driven Opportunities

TL;DR

Event-driven investment strategies offer opportunities in a mature credit cycle, providing a way to generate alpha and create idiosyncratic returns that don't correlate with market trends.

Transcript

it's a real pleasure to be back here and I'm gonna congratulate Anthony and the entire sky bridge team for putting on yet another successful conference before we get started everyone has the biographies of our panelists here but I wanted them to each take the opportunity to introduce themselves perhaps for the fact that's not find in their written ... Read More

Key Insights

• 🫤 The consolidation in the healthcare industry is a thematic opportunity, similar to what happened in the telecom and tech sectors 20 years ago.
• 📼 There are opportunities in structured credit, particularly in the mortgage market and in private debt where there is a match of assets and liabilities.
• 🎁 Brexit presents opportunities in the real estate, consumer discretionary, and retail sectors in the UK, regardless of the outcome.
• 🇮🇳 The Chinese onshore market, as well as the Asian market and the restructuring system in India, offer interesting opportunities.
• 🫢 The oil and gas industry may present opportunities for investors with a multi-year outlook and staying power, as the sector is currently undervalued.

Questions & Answers

Q: What is the main benefit of event-driven investment strategies?

Event-driven strategies provide opportunities to invest in changes that originate in the boardroom, offering both hard and soft catalysts that can generate significant value. They allow investors to create idiosyncratic returns that don't correlate with market trends.

Q: How does the current credit cycle impact event-driven strategies?

The current credit cycle is mature, and while it is difficult to predict when it will end, it is important to be prepared for a downturn. Event-driven strategies can help investors affect their own fate and generate returns by investing in catalyst-driven opportunities during a distressed credit cycle.

Q: How do event-driven investors differentiate themselves in sourcing opportunities?

Sourcing opportunities in event-driven strategies requires a focus on smaller capital structures and less crowded markets. Engaging with companies directly and offering thought leadership can provide unique opportunities. In private markets, there are opportunities in areas like structured credit and distressed debt.

Q: How does the rise of private markets impact event-driven strategies?

The rise of private markets is significant, but event-driven strategies can still find opportunities in smaller capital structures and unique situations. Private markets offer liquidity that is not dependent on banks, making it possible to deploy capital during distressed times. However, these strategies require a focus on specific sectors and geographies.

Summary & Key Takeaways

• Event-driven investment focuses on investing in changes that happen in the boardroom, providing both hard and soft catalysts in both equity and credit markets.

• Private markets offer opportunities for event-driven strategies, as they provide liquidity and the ability to deploy capital during a distressed credit cycle.

• The current cycle is unique, with different sectors and geographies experiencing mini-cycles, making it important to differentiate between various strategies and adapt to the changing market conditions.