Income Strategy

An Unconventional Approach to Income

Why our Income Strategy?

Align Interests: We are the largest individual investors in the strategy, aligning our interests with those of our investors.

Focus on Value: By targeting high-yielding securities at significant discounts to their intrinsic values, we attempt to generate capital appreciation on top of high current income.

Migrate to Opportunity: The Strategy can own almost any type of security across the globe, allowing us to invest tactically in the asset classes we think are likely to generate the best risk-adjusted returns. Income Strategy can own high-yield corporate debt, income-paying common stock, preferred shares, convertible securities, REITs, business development companies, MLPs and more.

Why Now?

Enhance Income: After years of low yields for traditional income investments, many investors are looking to enhance their portfolio with higher yields.

Manage Duration: Investors worry about their bond portfolios in a rising-rate environment. A flexible, actively managed portfolio of income-paying securities may exhibit less duration risk than traditional fixed-income securities.

Mitigate Volatility: Nontraditional income sources may offer the opportunity for higher yields and the potential for higher long-term capital appreciation. When actively managed in a single portfolio, alternative income sources’ potential for lower correlations may mitigate excessive volatility.

Stay Active: As an active manager, we have the ability to take advantage of changing market conditions and exercise our patient, long-term approach.

4Q 2018 Portfolio Snapshot

All data as of 12/31/2018
Investment Minimum: $10 million

Annualized Performance1

  • Gross of Fees
  • Net of Fees
  • ICE BofA Merrill Lynch High Yield Master II

 

QTD

YTD

1-Year

3-Year

5-Year

Since Inception (4/3/09)

Gross of Fees

-17.1%

-7.1%

-7.1%

8.1%

2.4%

14.0%

Net of Fees

-17.3%

-8.0%

-8.0%

7.1%

1.3%

12.8%

Merrill Lynch US High Yield Master II

-4.6%

-2.2%

7.3%

3.8%

10.7%

Allocation Breakdown2

  • Equity 40.22%
  • Publicly Traded Partnerships (PTPs) 23.26%
  • Bonds 14.71%
  • Real Estate Investment Trusts (REITs) 14.06%
  • Business Development Companies (BDCs) 3.92%
  • Bank Loan 3.26%
  • Preferred Equity 0.57%

Asset Allocation2

  • Common Equity 81.8%
  • Fixed Income 18.3%
  • Preferred Equity 0.6%

Top 10 Holdings By Issuer2

  • Macquarie Infrastructure Corp. 5.70%
  • Apollo Global Management LLC, Class A Shares 5.28%
  • Carlyle Group LP 5.08%
  • Avon Products, Inc. 5.04%
  • Just Energy Group Inc. 4.94%
  • Alrosa PJSC 4.02%
  • The Blackstone Group L.P. 3.80%
  • National CineMedia, Inc. 3.72%
  • Arlington Asset Investment Corp. 3.56%
  • General Electric Company 3.47%

Characteristics2

  • Number of Holdings 38
  • Current Yield3 9.13%
  • Annual Turnover 42.50%