Our Research & Investment Methodology

Credit Fund

River Capital has implemented a disciplined and thorough investment and portfolio construction process that identifies, selects and actively monitors a concentrated portfolio of debt securities.

River Capital’s research and investment process includes:

  • Credit Analysis – The credit quality of each issuer is assessed using a disciplined credit assessment process that includes:

       -   building and maintaining credit models

       -   ongoing review of public documents and research

       -   analysis of macro industry and company fundamentals

       -   analysis of the capital structure of the issuer

       -   independent legal and tax review of the particular issue

       -   ongoing dialogue with the issuer, industry participants and analysts

  • Investment Committee – All potential investments are subject to the final review and approval of our Investment Committee prior to making an investment. Once  acquired, the committee meets regularly to review portfolio composition and performance.
  • Portfolio Construction – River Capital has established portfolio guidelines that are strictly monitored by the management team and Investment Committee. We undertake ongoing portfolio simulation work to ensure that maturity profiles, credit quality, issuer exposure, interest rate and currency risk, and portfolio limits are properly managed. Additionally, River Capital uses its proprietary “fair value” and “relative value” models to determine whether the securities under consideration represent fair value when compared to alternate investments, such as term deposits, listed hybrids, senior debt instruments and equivalent securities issued by various issuers.
  • Sourcing and Trading – In illiquid credit markets, access to the most attractive investment opportunities is dependent on global relationships and market knowledge. River Capital leverages its existing relationships with various investment banks, brokers and market makers to ensure access to the most attractive opportunities globally, and to ensure optimal pricing on both entry and exit of positions.
  • Monitoring – The management team is responsible for ongoing credit analysis, updating credit models, reviewing research, company releases, press releases and news stories as well as maintaining dialogue with the management of all companies in the portfolio.
  • Risk Management - We undertake ongoing portfolio simulation work to make sure that maturity profiles, credit quality, issuer exposure, interest rate and currency risk and portfolio limits are properly managed. In circumstances where collateral is provided in support of hedging contracts to protect against adverse movements in currencies or interest rates, the portfolio is subject to regular stress tests to limit the prospect of margin calls.