Total Return Credit

Management & Investment Process

  • Management

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

    • Benjamin J. Santonelli

      Portfolio Manager

      • 17

      • Years Industry
    • John W. Sherman

      Assistant Portfolio Manager

      • 17

      • Years Industry
  • Investment Process

  • The strategy seeks to exploit inefficiencies in the middle market, lower-tier, and leveraged loan segments of the high yield market and prudently capture the significant illiquidity premium often available in such markets. Polen Capital Credit aims to identify mis-priced credit risk and construct a concentrated portfolio that can generate attractive returns relative to the amount of credit risk assumed.

    • Bottom-up Fundamental Research
      • Analyze entire company, not just an individual bond/loan 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 flow
    • Minimize Credit Losses
      • Calculate and continuously monitor company’s total enterprise value
      • Focus on loan-to-value and cash flow
      • Only invest in securities with appropriate margin of safety
      • ESG factors evaluated for each investment
    • Legal Protections
      • Understand contractual protections in debt agreements
      • Assess “waterfall of value” and downside scenarios
    • Portfolio Construction
      • Security selection drives performance
      • No macro bets or themes
      • Concentrated portfolios – 35 to 55 positions
      • Long-term investment horizon
      • Limited exposure to stressed/distressed securities
      • Capture illiquidity premium
  • 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.