The three senior partners of the firm; Neil Servis (CEO), Serj Walia (CIO) and Adrian King (COO) each have over twenty years of experience within the credit markets from both the buy and sell side, have arranged/invested in a mixture of structured, high yield and distressed credit. They were active participants in the evolution of this market over their careers.
The motivations for setting the firm up were and continue to be: taking advantage of stress and relative value within the credit markets, generating alpha by trading in complex, less competitive/efficient situations, benefiting from bank deleveraging due to capital shortfalls and new regulations, leveraging long standing relationships within the market place to source assets and applying a trading overlay to in-depth fundamental credit analysis.
The firm’s flagship fund: The Serone Key Opportunities Fund is award winning, with a multi-year track record, performing in excess of its annualised return target. Investors include both institutional and high-net-worth, and US onshore and offshore.
Serone’s founding principle is to bring together professionals with skills and experience within different credit market segments to create an integrated asset manager that can pursue attractive investment opportunities with the benefit of its team’s combined analytical and market-related expertise. Serone professionals have fostered deep relationships at senior levels with dealers, issuers and managers – this network underpins our strong investment-sourcing capabilities.
We are committed to creating value for our investors. We believe in building long-term partnerships, which includes sharing risk and returns. Our independent Advisory Board advances our mission to pursue this commitment with solid corporate governance and appropriate perspective.
Our Investment Approach emphasises detailed, bottom-up analysis of each potential investment to assess the true value of its future cash flows. Serone then seeks to maximise returns by timing both entry and exit of investments in the context of market ‘colour’ and dynamics. Overlaying a more active trading philosophy onto our fundamentally-driven analytical framework often leads to opportunities to capture additional value from price discrepancies.
For Serone, investment analysis must comprise both quantitative assessments of operating performance and credit metrics, including detailed cashflow forecasting and stress testing; and qualitative assessments of the legal, structural and management-related aspects of any investment. Investment Team will consider the performance of comparative investments (both from the same issuer and from others in the same sector) and public third-party research to assess market sentiment. Importantly, our investment professionals will also gather market colour and advice from each others’ market segments to enhance their views.
Capturing the value offered by in-depth fundamental analysis of complex instruments, and using this complexity to generate alpha rather than using it as a reason to reject the asset class. CDOs and CLOs remain a very efficient financing vehicle, if structured appropriately. Our analytical process, combined with many years of experience in structuring and investing in structured credit, is designed to find the value in this asset class. The supply side is very active, as banks need to shrink their balance sheets and very often have reduced the teams that manage their exposure to structured credit. Pressure from regulators and increasing capital charges only reinforce this trend. On the demand side, the typical structured credit investors that bought the assets based on ratings are largely absent, leaving a huge opportunity for investors with a multi-year investment horizon and the know-how to analyse the instruments.
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