Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Artificial Intelligence
    • Consultants
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • SECURE 2.0
    • Special Reports
    • Washington
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Influential Women in Institutional Investing 2023
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • 2023 ESG Investing Conference
    • ESG Rated ETFs
    • Divestment Database
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2023 Defined Contribution East Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
Breadcrumb
  1. Home
  2. HEDGE FUNDS
January 28, 2019 12:00 AM

Canyon Partners readies war chest for when pricing and risk align

Bloomberg
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Bloomberg
    Joshua Friedman, co-chief executive and co-founder of Canyon Partners

    Canyon Partners' top executive says the hedge fund has a large cash position waiting on the sidelines, ready to be put to work after a sell-off.

    The Los Angeles-based firm is "significantly underinvested" with capacity to deploy capital when prices become more reasonable, Canyon's co-CEO Joshua Friedman said in an interview with Bloomberg TV's Erik Schatzker in Davos, Switzerland. In the current environment where rates and spreads are low, the new issue market is "particularly unattractive," he said.

    Mr. Friedman, who correctly projected the sell-off in 2018 amid rising rates, said this year will bring more volatility, a "sawtooth of ups and downs" in credit. When there's an adjustment in the market that's sudden and sharp, "you want to have a shopping list and cash ready to go to take advantage of it," said Mr. Friedman, who is also a co-founder of Canyon. "Sometimes the best names produce the biggest discounts or the best discounts for the risk" you're taking, he said.

    Market panic

    Canyon invested $1.5 billion to $2 billion in bank debt and equities in December. That money was deployed not only in the secondary market, but directly to help banks relieve themselves from obligations at a discount or with issuers to close a deal, Mr. Friedman said. In a volatile credit market, bank debt is more resilient, but high-yield bonds give investors a better total return opportunity when you find a forced seller, he said.

    At the top of Mr. Friedman's list of concerns is the adverse market reaction that can occur when the Federal Reserve raises rates again, creating panic and an imbalance between supply and demand, he said. He also worries about the "mountain" of BBB-rated debt that could get downgraded and affect the high-yield universe.

    Canyon started to invest in utility giant PG&E, which is making preparations for a bankruptcy filing as soon as next week. The situation is interesting for debt holders, but still in early stages, Mr. Friedman said. It's going to be "a very long ball game," similar to multibillion-dollar bankruptcies like Lehman Brothers and the ongoing restructuring of Puerto Rico. "We've dipped our toe" in PG&E, Mr. Friedman said, declining to comment further on the extent to which the firm is involved. We'll have to wait and see as it takes place, he said.

    The fund has also spent time looking at General Electric but finds the story is difficult to fully unpack. "It's very hard to look at the debt and see enough return in it today to pay for the opacity of the situation," Mr. Friedman said. The debt isn't cheap enough to be "particularity interesting at this point," he said.

    Canyon hasn't been involved in Sears Holdings, which is going through a Chapter 11 restructuring, but there may be opportunities down the road, Mr. Friedman said.

    Related Articles
    CalSTRS slates initial $200 million for joint venture with 3650 REIT
    Active management growing, but pace lags
    Brookfield closes its largest global real estate fund at $15 billion
    Recommended for You
    Michael_Sonnenshein_1550_i.jpg
    Hedge fund efforts to add co-plaintiffs to Grayscale suit fall short, amended complaint shows
    Boaz_Weinstein_2023_i.jpg
    Sculptor says Weinstein's revised bid shows he wants to run firm
    David_Bailey_1550_i.jpg
    Hedge funds rally 'mutiny' against Grayscale over fees
    Carving a Path For Fixed Income Through Shifting Scenarios
    Sponsored Content: Carving a Path For Fixed Income Through Shifting Scenarios
    Sponsored
    White Papers
    2023 Hot Topics in Retirement and Financial Wellbeing
    Bonds: Shaken, but Not Stirred
    Today’s rate cycle and US equities in target date portfolios
    A Study of Allocations to Alternative Investments by Institutions and Financial…
    Unlocking Hidden Value in Japan
    The Art of the Possible in Data Automation for Institutional Investors
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Artificial Intelligence
      • Consultants
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • SECURE 2.0
      • Special Reports
      • Washington
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Influential Women in Institutional Investing 2023
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • 2023 ESG Investing Conference
      • ESG Rated ETFs
      • Divestment Database
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2023 Defined Contribution East Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars