Credit Market Opportunities Webinar: How Can Investors Take Advantage?
In this webinar, credit investment portfolio managers Dave Breazzano, Ben Santonelli, and John Sherman break down recent developments in the leveraged credit markets and explain how their investment approach seeks to exploit mispriced risks.
Webinar Chapters
- 00:57 – Why is the credit market attractive now?
- 2:35 – Addressing investor concerns about credit investing
- 6:55 – Polen’s differentiated approach to credit investing
- 11:35 – Incorporating private equity sponsored businesses
- 13:07 – Protecting our investments when a company struggles
- 17:10 – How the Polen Credit Opportunities Fund (PCOFX) may help our clients find value in the current credit market
Important Disclosures
This information is provided for illustrative purposes only. Opinions and views expressed constitute the judgment of Polen Capital as of October 2023 and may involve a number of assumptions and estimates which are not guaranteed and are subject to change without notice or update. Although the information and any opinions or views given have been obtained from or based on sources believed to be reliable, no warranty or representation is made as to their correctness, completeness, or accuracy. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions (including, without limitation, with respect to the expected default environment) constitute our judgment and are subject to change without notice, including any forward-looking estimates or statements which are based on certain expectations and assumptions. The BB component of the high yield index temporarily exceeded current levels in the immediate aftermath of the onset of the COVID-19 pandemic in 2020 as well as briefly in mid-2016. The views and strategies described (and in particular in relation to the interval fund) may not be suitable for all investors.
This document does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction. It is possible to lose money on an investment in the interval fund or any other product managed by Polen Capital. Past performance does not guarantee future results and profitable results cannot be guaranteed.
Any potential return associated with an investment in the interval fund described in this video is generally aspirational in nature, is not based on any specific criteria or assumptions, and is not a guarantee. Similarly, the ability to generate a particular coupon income or generate a particular yield over any period of time is aspirational in nature and subject to change depending on then-current market conditions (including, without limitation, underlying interest rates). Actual performance results of the interval fund, which may not achieve this performance objective, will vary depending on then-current market conditions and the individual investment decisions implemented by Polen Capital.
The information in this video has been prepared without taking into account individual objectives, financial situations or needs. It should not be relied upon as a substitute for financial or other specialist advice. This video is provided for informational purposes only and may not be reproduced in any form or transmitted to any person without authorization from Polen Capital.
Risks associated with investing in an interval fund:
General: It is possible to lose money on an investment in the interval fund. Fixed income investments, such as high yield bonds, are subject to interest rate risk; as interest rates rise, their value will decline. Lower-rated securities are subject to additional credit and default risks. Investments in bank loans, which are made by banks or other financial intermediaries to borrowers, will depend primarily upon the creditworthiness of the borrower for payment of principal and interest. Trading in Rule 144A securities may be less active than trading in publicly traded securities. Investments with low trading volumes may be difficult to sell at quoted market prices. Although some default situations may prove profitable, investments in defaulted securities may result in material principal loss to an investment in the interval fund. No assurance can be given that the interval fund will achieve its objective or avoid losses.
Fund Risk: Although Polen Capital has managed the investment strategy pursued by the interval fund for over 13 years, the interval fund itself is only recently organized. There can be no assurance that the interval fund will reach or maintain a sufficient asset size to effectively implement its investment strategy.
Illiquidity of Shares: The interval fund is designed for long-term investors and not as a trading vehicle. An investment in the shares of the interval fund, unlike an investment in a traditional listed closed-end fund, should be considered illiquid. The shares are appropriate only for investors who are seeking an investment in less liquid portfolio investments within an illiquid fund. Interval fund investing involves risk, including possible loss of principal. The interval fund is non-diversified, which means that a large portion of the Fund’s assets may be invested in one or a few companies or sectors. Accordingly, the interval fund could fluctuate in value more than a diversified fund.
A prospectus for the Polen Credit Opportunities Fund, which includes more comprehensive disclosure of the risks associated with investing in the interval fund, is available at; an investor should read it carefully before investing. The interval fund is not suitable for all investors.
The Polen Credit Opportunities Fund is distributed by Foreside Funds Distributors LLC., which is not affiliated with Polen Capital Management.
Definitions:
Alpha: A measure of the difference between a portfolio’s actual returns and its expected performance, given its level of risk as measured by beta.
Bank Loan: A debt instrument arranged by a bank (or similar financial institution) to a company that typically holds legal claim to borrower’s assets that are senior to all (or substantially all) other debt obligations.
Floating Rate: Reflects debt instruments that carry floating interest rates. A floating interest rate changes periodically, as opposed to a fixed (or unchanging) interest rate and follows an index or track another benchmark interest rate.
High Yield Bond: A debt security issued by a corporate entity where the debt has lower than investment grade ratings. It is a major component, along with leveraged loans, of the leveraged credit market.
Issuer: An issuer is a legal entity that issues financial instruments to generate income to fund operations. Issuers are corporations, investment trusts, or domestic or foreign governments.
Private Credit: Private credit investments provide access to potentially higher yielding, less liquid investment opportunities and covers an array of instruments that span the capital structure and borrower. At Polen Capital, this includes direct originations with a “middle-market” focus. Middle market companies are defined by Polen Capital as companies with normalized EBITDA between $75mm and $250mm.
Past performance is not indicative of future results and profitable results cannot be guaranteed. This information should not be construed as a recommendation to purchase, hold, or sell any particular security. Specific securities described may or may not be held in portfolios managed by Polen Capital. There is no assurance that any securities discussed herein will be in the portfolio at the time you review this video or that any securities sold have not been repurchased. The securities discussed do not necessarily represent the entire portfolio. It should not be assumed that any of the securities, transactions or holdings discussed were or will prove to be profitable or that any investment recommendations we make in the future will equal the investment performance of the securities discussed herein. For a complete list of Polen Capital’s past specific recommendations for the last year, please contact [email protected]