Investment Process

Managing non-investment grade credit products requires a systematic, disciplined investment process that can react quickly to changing conditions.

The specific steps in our investment process are as follows:

Bottom-Up Credit Analysis
Detailed, thorough, fundamental credit analysis is a critical component of Four Corners’ investment process. Every credit undergoes detailed analysis of cash flows, collateral, management, ownership, liquidity and transaction terms. Risk analysis identifies key risk factors that are tracked continuously. Our process heavily emphasizes asset coverage, debt subordination and covenants to determine our expected recovery in an event of default.

Top-Down Portfolio Management
Four Corners includes top-down analysis as part of its investment process. We conduct economic analysis to develop and maintain a macroeconomic outlook which considers economic, credit, and geopolitical factors. We also conduct detailed industry reviews with an emphasis on identifying risk factors and drivers of sector volatility. The goal of our economic analysis is to identify and emphasize sectors that we think are generally defensive and asset-rich, and to attempt to avoid those industries and issuers that are likely to experience excess volatility or otherwise fail to deliver acceptable risk-adjusted returns. The economic analysis we conduct is combined with our consideration of client portfolio objectives and constraints, which leads to our consistent and disciplined portfolio construction process. We systematically size every position based on default, recovery and liquidity estimates to achieve broad diversification and manage issuer and industry concentrations.

Decision Making/Credit Selection
The investment team has extensive experience across capital markets and within the bank loan market. The goal of our investment decision making process is to harness the team’s collective experience and judgment in order to make well considered and thoughtful investment decisions.

Investment Monitoring
Active and systematic monitoring are key components of our investment process. While Four Corners believes that its initial credit analysis and investment process results in appropriate investment decisions, we also believe that sell discipline, not over-reliance on front-end analysis, is essential to producing superior returns. We actively monitor market and credit-specific factors, and consistently and systematically re-evaluate our initial investment thesis in the context of any changes which may be taking place among these factors. We endeavor to conduct rapid analysis and take swift and decisive action when negative events occur.

* The information contained herein does not constitute a distribution, an offer to sell or the solicitation of an offer to buy any securities or investment services. Past performance is not intended to imply nor should it be considered to be a promise or guarantee of future performance. Funds managed by Four Corners may fail to achieve stated investment objectives. Investors should consult with their brokers or investment advisers prior to considering an investment in any Four Corners products.