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For all of our strategies, Post applies our consistent, research-based investment philosophy based on value identification, downside protection, and risk diversification. When analyzing opportunities, we look at all levels of the capital structure, as chances are the opportunity may be suitable for multiple investment products.
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Post has managed its Traditional High Yield strategy since 1993. Traditional high yield securities are primarily rated from BB- to B+ and carry the lowest risk in the high yield spectrum. Investments in this strategy normally include liquid, dollar-denominated securities with an issue size of at least $100 million. Post's Traditional High Yield composite is highly diversified, with internal limits of 15% per industry and 5% per issuer - but in practice exposure is normally under 10% and 3%, respectively. The objective of this strategy is to outperform the benchmark over a full market cycle with below-market volatility.
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The High Yield Plus strategy has been employed by Post since 1992. It is a tactical combination of high quality, medium quality, and lower quality high yield issues with an overall average quality rating of B to B-. On a very limited basis, the High Yield Plus strategy may invest in private debt, bridge loans, non-U.S. investments and lower quality "stressed" securities. It also may engage in currency hedging for non-U.S. investments. Volatility is reduced through diversification, intensive credit research and a relatively short average life (about five years). The objective of this strategy is to outperform the benchmark with below-market volatility.
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