Broadly Syndicated Loans

Our Tradable Credit strategy is a research-driven approach to credit investing combined with proactive trading investing in the non-investment grade credit market, particularly in secured bank loans, structured credit and high-yield securities. This investment philosophy is executed in two strategies: collateralized loan obligations (CLOs), and total return strategies.

Investment Approach

Our objective is to provide investors with differentiated exposure to the leveraged finance markets, creating total return through a systematic approach to managing credit risk. We seek to add value across various economic, credit and industry cycles.

Competitive Advantages

  • Long tenured investment team

    The Tradable Credit Team is one of the oldest and most experienced bank loan managers in the leveraged loan space.] The individuals on our Tradable Credit Investment Committee have, on average, over 30 years of experience managing bank loans. We believe this depth of experience across economic and credit cycles offers valuable perspective and investment insight.

  • Proprietary LCAP Credit Scoring System

    Our in-house built quantitative framework utilizes cash flow modeling, credit and collateral scoring, risk management and information monitoring.  We believe that this proprietary scoring system helps us to generate differentiated views on credits and industries.

  • Analyst coverage by industry

    Credit analyst team organized by industry allowing for deep knowledge around industry trends and the competitive landscape. We seek to keep our credit issuer to analyst ratio low to allow for deeper analysis of credits.

  • Dynamic Portfolio Management and Trading Style

    We are continually seeking out new alpha opportunities through market and credit analysis as well as identifying trading anomalies. We believe a dynamic approach to trading is a significant variation from other loan managers.

  • James Fellows

    CIO of FEAC, Head of Tradable Credit Team

    Industry start:  
    1987
    Year joined:  
    2004
  • Michael A. Herzig

    Senior Managing Director, Head of Business Development

    Industry start:  
    1990
    Year joined:  
    2008
  • Robert Hickey

    Senior Managing Director and Senior Portfolio Manager

    Industry start:  
    1990
    Year joined:  
    2004
  • Steve Krull

    Managing Director and Head of Trading

    Industry start:  
    1998
    Year joined:  
    2004
  • Brian Murphy

    Senior Managing Director and Head of Capital Markets

    Industry start:  
    1992
    Year joined:  
    2004

Our Process

The investment team utilizes a multi-dimensional approach considering both top-down and bottom-up analysis to identify investment opportunities.

FEAC’s Tradable Credit platform employs an intensive research driven approach to credit investing combined with proactive trading.  The investment team utilizes a multi-dimensional approach considering both top-down and bottom-up analysis to identify investment opportunities.
Top-down macroeconomic analysis of the business cycle and industry trends allows us to identify our favored industry groups and sectors. Conducting industry reviews regularly, coupled with continual monitoring of the market are a critical component to portfolio construction and our understanding of industries and business on a relative basis. Relative value is an essential part of our investment diligence and Investment Committee approval. Relative value is determined in a variety of ways. including comparisons of opportunities available in the same asset class, portfolio companies in similar industries, and across the capital structure.
Comprehensive bottom-up fundamental credit analysis is done through our proprietary LCAP Credit Scoring System provides a common framework for the quantitative analysis of all credits as well as generates credit scores and collateral scores allowing easier comparison of credits. The team also uses qualitative analysis to focus on an issuer’s core business competencies, management expertise, and competitive advantages. We believe that the key to capital preservation is comprehensive and fundamental credit analysis.
  1. Risk Disclosures

  2. Alternative Credit Risks

  3. Alternative investments can be speculative and are not suitable for all investors. Investing in alternative investments is only intended for experienced and sophisticated investors who are willing and able to bear the high economic risks associated with such an investment. Investors should carefully review and consider potential risks before investing. Certain of these risks include:

    • Loss of all or a substantial portion of the investment;
    • Lack of liquidity in that there may be no secondary market or interest in the strategy and none is expected to develop;
    • Volatility of returns;
    • Interest rate risk;
    • Restrictions on transferring interests in a private investment strategy;
    • Potential lack of diversification and resulting higher risk due to concentration within one of more sectors, industries, countries or regions;
    • Absence of information regarding valuations and pricing;
    • Complex tax structures and delays in tax reporting;
    • Less regulation and higher fees than mutual funds;
    • Use of leverage which magnifies the potential for gain or loss on amounts invested and is generally considered a speculative investment technique and increases the risks associated with investing in the strategy;
    • Carried interest which may cause the strategy to make more speculative, higher risk investments that would be the case in absence of such arrangements; and
    • Below investment-grade loans which may default and adversely affect returns.
  4. Disclosures

  5. These are not investment guidelines or restrictions and will be subject to change. Actual portfolio will differ.

  6. FEF Distributors, LLC (Member SIPC) distributes certain First Eagle products; it does not provide services to investors. As such, when FEF Distributors, LLC presents a strategy or product to an investor, FEF Distributors, LLC  does not determine whether the investment is in the best interests of, or is suitable for, the investor. Investors should exercise their own judgment and/or consult with a financial professional prior to investing in any First Eagle strategy or product.

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