A powerful rally in high yield credit in 2016 coupled with low government bond yields has sent the yield to worst of the High Yield index towards historically low levels.  However, opportunities for total return still exists for investors willing to deviate away from the core index names and into the broader credit universe.  A flight to quality during the recent rally has created elevated yield dispersion between the BB and CCC rated names.  Further, even with default rates expected to drop in 2017, opportunities abound for investors with restructuring expertise. 

Finally, asset managers who can provide capital market solutions directly to companies are finding numerous opportunities to structure deals with attractive economics.  These alternative asset managers are supplying capital to both private and “liquid” public markets,  have much greater underwriting flexibility, and can react faster to the specific needs of companies.  This has created a powerful value proposition, and allows experienced managers to both identify and create opportunities in a variety of market environments, particularly during periods of market dislocation and global uncertainty.

Now more than ever, not just active but proactive management is necessary to generate attractive returns in the credit markets.

J. CARNEY HAWKS, CFA, Head of Special Situations/Partner 

Mr. Hawks is the Head of Special Situations and a member of the Investment Committee . Prior to joining Brigade, Mr. Hawks was a Managing Director in the High Yield Division of MacKay Shields, LLC from 1998 to 2006, where he covered the energy, gaming and retail sectors, among others. Mr. Hawks also served as an Investment Banking Analyst in the Financial Entrepreneurs Group at Salomon Smith Barney. Mr. Hawks received a BS with Distinction from the University of Virginia’s McIntire School of Business. Additionally, Mr. Hawks is a CFA charterholder.