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The Columbia Leveraged Debt Group believes strong and consistent risk-adjusted returns in the bank loan market are best achieved through the pro-active management of credit risk combined with a strategy to seek out relative value opportunities. The Columbia Bank Loan Strategy seeks to construct a broadly diversified portfolio of bank loans that maximizes return and minimizes default risk over the long run.

Investment Approach

The team believes strong and consistent risk-adjusted returns in the bank loan market are best achieved through the pro-active management of credit risk combined with a strategy to seek out relative value opportunities. They believe the most important key to success in bank loan investing is a mastery of credit skills to determine which companies will have the wherewithal to withstand a credit cycle or other financial events and employ a proprietary internal rating system to help guide position sizing.

Distinguishing Features

  • Deep and stable investment team of leveraged debt specialists with an active presence and longevity in the bank loan market providing a unique combination of deep resources with boutique focus and flexibility
  • Extensive commitment to fundamental credit research by a team with 20-plus years of experience specifically in the leveraged loan market.
  • The team’s experience, size and presence in the market have led to top-tier allocations in the primary origination market as well as strong secondary activity.
  • Independent, proprietary risk and relative value rating system and constant focus on downside risk management
  • A commitment to client-driven, customized investment solutions and service

Investment Process

Bottom-up fundamental credit research
  • Analysts and portfolio managers partner to identify primary and secondary market opportunities
  • Research process focuses on identifying the critical credit fundamentals of each issuer
    • Analyze a company’s business prospects, its management, liquidity, capital structure and its competitive standing in the market
    • Assess collateral quality, loan-to-value coverage and conduct a review of the capital structure and relevant loan documents.
Ongoing research and monitoring
  • Review watch list
  • Industry and holdings review
  • Secondary opportunities
  • Primary market pipeline
Portfolio construction/risk management
  • Client objectives/constraints
  • Issuer and industry diversification
  • Risk rating system
  • Appropriate position sizing