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Please read the following terms and conditions carefully. By accessing rbcgam.com and any pages thereof (the "site"), you agree to be bound by these terms and conditions as well as any future revisions RBC Global Asset Management Inc. ("RBC GAM Inc.") may make in its discretion. If you do not agree to the terms and conditions below, do not access this website, or any pages thereof. Phillips, Hager & North Investment Management is a division of RBC GAM Inc. PH&N Institutional is the institutional business division of RBC GAM Inc.

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About Our Funds

The Funds are offered by RBC GAM Inc. and distributed through authorized dealers. Commissions, trailing commissions, management fees and expenses all may be associated with the Funds. Please read the offering materials for a particular fund before investing. The performance data provided are historical returns, they are not intended to reflect future values of any of the funds or returns on investment in these funds. Further, the performance data provided assumes reinvestment of distributions only and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. The unit values of non-money market funds change frequently. For money market funds, there can be no assurances that the fund will be able to maintain its net asset value per unit at a constant amount or that the full amount of your investment in the fund will be returned to you. Mutual fund securities are not guaranteed by the Canada Deposit Insurance Corporation or by any other government deposit insurer. Past performance may not be repeated. ETF units are bought and sold at market price on a stock exchange and brokerage commissions will reduce returns. RBC ETFs do not seek to return any predetermined amount at maturity. Index returns do not represent RBC ETF returns.

About RBC Global Asset Management

RBC Global Asset Management is the asset management division of Royal Bank of Canada ("RBC") which includes the following affiliates around the world, all indirect subsidiaries of RBC: RBC GAM Inc. (including Phillips, Hager & North Investment Management and PH&N Institutional), RBC Global Asset Management (U.S.) Inc., RBC Global Asset Management (UK) Limited, RBC Investment Management (Asia) Limited, BlueBay Asset Management LLP, and BlueBay Asset Management USA LLC.

Forward-Looking Statements

This website may contain forward-looking statements about general economic factors which are not guarantees of future performance. Forward-looking statements involve inherent risk and uncertainties, so it is possible that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement. All opinions in forward-looking statements are subject to change without notice and are provided in good faith but without legal responsibility.

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The strategy invests in a diverse portfolio of opportunities comprising liquid stressed, distressed, and special situation investments in the global leveraged loan and high yield markets.

Our investment universe comprises restructuring, event-driven opportunities, and stressed situations combined with core income. We focus on identifying opportunities with a clear path to exit using bottom-up research and fundamental credit analysis. Our team has both the resources and expertise to participate in and, in many cases, lead the restructuring process, which means we can provide our expertise from start to finish in order to drive a consensual restructuring.

Strategy overview

  • Targets attractive risk‐adjusted returns from investing primarily in stressed and event-driven opportunities through a combination of both income and capital appreciation
  • Capital preservation mindset focused on downside protection as well as total returns
  • Forensic approach to proprietary research
  • Exacting approach to credit selection and portfolio construction
  • ESG analysis integrated into credit assessment process
  • Longstanding team of highly experienced research analysts and portfolio managers
  • Repeatable process helps maximize the probability of successful outcomes

Our approach

Investment philosophy & style

The strategy is focused on investing in what the team considers to be fundamentally mis-valued credit securities, allocating freely between bonds and loans and with a focus on developed markets.

Investments are typically held for 6 to 18 months, and the managers select single-name corporate issuers where an identified event is likely to provide a clear path to exit. The investment process is predicated on maximizing risk-adjusted returns and utilizes the skills of the wider BlueBay leveraged finance analyst team, ensuring breadth and depth of issuer coverage.

Investment process

  • Top-down macro inputs help inform thematic credit strategies.
  • Active allocation within individual capital structures based on the asymmetric risks identified within each opportunity via:
    • in-depth proprietary analysis and modelling with a focus on downside stress test;
    • particular focus on covenant analysis and management engagement; and
    • restructuring analysis encompassing specialist internal and external resource.
  • Deep, fundamental research-oriented approach undertaken by the wider BlueBay leveraged finance team focuses on rigorous bottom-up security selection.
  • The consideration of environmental, social, and governance (ESG) factors is an important aspect of the investment process and is integrated in all investment decisions.

Portfolio construction

The strategy is allocated across four principal categories:

  • Event Driven/Stressed: Identifying credits where there is a near- to medium-term event such as asset sale/refinancing/M&A, or where an operational or financial turnaround is anticipated.
  • Restructuring: Active participation in selective restructuring situations.
  • Core Income: Conviction views in higher yielding credit.
  • Credit shorts: Short position in corporates with sector stress/deteriorating cash flow profiles.
  • Typically hold 30–50 core positions.
  • Holdings diversified by industry, sector, and geography, with limits on security concentration.
  • Disciplined focus on downside risk management.

Additional information

Inception
December 2009

Investment team

BlueBay Fixed Income team

Fixed income specialist providing progressive investment solutions

Connect with our team to learn more

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