Our objective has always been to generate attractive risk adjusted returns through the application of a disciplined, fundamental, and active investment process.

We believe there are specific and persistent inefficiencies in the corporate credit markets offering opportunities to generate true alpha. Central to our core philosophy is a belief that the credit ratings process employed by the main rating agencies is flawed.

Their methodology favours large enterprises with long histories. This process tends to punish issuers who are perceived as “small” which today includes almost everything under $600 million in tranche size. Not setting artificial constraints based on size or history allows us to view the entire leveraged finance market as our investment universe.

Our objective is to generate superior risk adjusted returns or alpha. For us, alpha is defined as capturing yield per turn of leverage well above those of the widely used indexes.

We focus on delivering sustainable yield and controlling default risk.

We believe most investors place too much reliance on credit ratings and feel rating agency algorithms are not the best risk proxy as they over-weight the size of a company. This ratings or size arbitrage creates opportunities for active credit investors such as Peritus, who view credit binary, either AAA or D.