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Invest Like the Best with Patrick O'Shaughnessy
Bryan Krug – High Yield Credit Investing - [Invest Like the Best, EP.114]
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Show Notes
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My guest today is Bryan Krug, who manages the Artisan Partners Credit Team and overseas more than $3B in high yield credit investments for the firm. This was my first conversation on high yield, so I took it as an opportunity to get an overview on the investment universe and home in on the tools used for analysis and security selection. As an equity investor, I think one of the most fruitful areas of research is into ways that companies fail or go wrong, and credit investors focus almost entirely on this potential for impairment. My guess is that all equity investors will learn something useful from this conversation. Please enjoy.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
– Overview of the high yield debt markets
– Why should investors consider this investment class
– How analyzing a company’s debt is different from what equity analysts look for
– Primary factors when exploring a company’s ability to de-lever
– What is their alpha vs others in the space
– Deep dive into the quantitative factors for them to look into a deal
– Benchmarks he uses
– Portfolio construction
– Their preference for broadband providers over cable tv networks
– What piques his interest about spreads
– The ratings of debt
– A recent example of an opportunity and how the mispricing was identified
– Most valuable data sets in this world
– Favorite part of this process
– Most surprising new learning
Maintaining your advantage
– The biggest pools of error in this industry
– What industries interest Bryan
– Dedication to this market
– Evolution of his healthy skepticism
– Can things in the debt market help to project what will happen in the equity markets
– Current view of the world based on what is happening in the credit markets
– Categories of convenience that he cares about
– Anything that has him worried in high yield markets
– Kindest thing anyone has done for Bryan
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
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