Bank Loan

Management & Investment Process

  • Management

  • The investment team leverages experience and knowledge within a disciplined investment process.

    • John Sherman

      Portfolio Manager

      • 17

      • Years Industry
        Experience
    • Benjamin Santonelli

      Portfolio Manager

      • 18

      • Years Industry
        Experience
  • Investment Process

  • The strategy seeks to exploit inefficiencies in the under-researched middle market and lower-tier (B/CCC-rated) segments of the leveraged loan market. Polen Capital Credit aims to construct a high-conviction portfolio with a yield advantage relative to the applicable benchmark while minimizing credit losses.

    • Bottom-Up Fundamental Research
      • Analyze entire company, not just an individual loan/bond tranche
      • 360-degree view of business – customers, suppliers, competitors
      • Identify sustainable competitive advantages
    • Cash Flow
      • Understand how a target company generates cash
      • Assess durability and sustainability of cash flows
    • Minimize Credit Losses
      • Calculate and continuously monitor company’s total enterprise value
      • Focus on loan-to-value and cash flow
    • Legal Protections
      • Understand contractual protections in debt agreements
      • Assess "waterfall of value" and downside scenarios
    • Portfolio Construction
      • Construct concentrated portfolios – overweight high confidence positions
      • Target first lien banks loans
      • Opportunistic allocation to higher yielding second-lien secured loans, short-dated high yield bonds, and private credit
      • Generate yield through the coupon, not by seeking stressed or distressed credit
      • Security selection drives performance
      • No macro bets or themes
      • Limit portfolio volatility
      • Long-term investment horizon
      • Monitor to provide for appropriate diversification and liquidity
  • Disclosures

  • Tranche: Tranches are pieces of a pooled collection of securities, usually debt instruments, that are split up by risk or other characteristics in order to be marketable to different investors. Each portion, or tranche, is one of several related securities offered at the same time but with varying risks, rewards and maturities to appeal to a diverse range of investors.

    Waterfall of Value: This term is used to describe, in the context of an issuer’s restructuring, the value that each class of debt must be repaid before any residual value is permitted to be distributed by the issuer to more junior classes of debt.