Sharif Anbar-Colas, head of structured credit at Kartesia, answers SCI's questions

Q: How and when did Kartesia become involved in the securitisation market?
A: Kartesia has been involved in the securitisation market for more than 10 years and made investments in securitised products from the first fund raised in 2010. This involvement came from an appreciation of how the securitised tranches of portfolios were trading at a discount to the actual names in the portfolio, despite having a structure that works to mitigate losses to the investor.

Q: What are Kartesia’s key areas of focus at the moment?
A: Kartesia is a firm that specialises in credit investments. The investment strategy is focused on capital preservation by sourcing credit risk in its optimal risk-adjusted form. We aim to achieve this through a combination of deploying capital into structured credit, direct lending and leveraged loans.

Q: What is your strategy going forward?
A: Kartesia will continue to enhance and develop its presence in all the areas we are currently active. This could be done by raising specific offerings to target opportunities we identify, as well as making selective additions to the team that will add value to ensure all the opportunities identified can be properly studied and executed.

Q: How will Kartesia expand its CLO investment capabilities?
A: The structured credit division is a key pillar of the firm and, as such, we are in a continual process of growth and development. Some ways this has taken form was in the recent hiring of a new member to the structured credit division, the continued buildout and development of our analytical capabilities, as well as identifying specific market opportunities that offer attractive risk adjusted returns and bringing them to the attention of investors.

Q: How do you differentiate yourself from others?
A: We offer a synergistic investment approach that combines the three strengths of the firm. The investment team comprises over 20 individuals with a thorough understanding of fundamental credit analysis; this enables us to review the assets in a CLO portfolio and come to a view on each name, even those that are less liquid or known.

The members of the structured credit team have decades of experience in analysing structures and navigating nuances in the legal language that underpins the documents governing these structures. This enables us to further segment the investable universe into distinct groups.

By leveraging the relationships and market experience of the different members of the firm, we can source and execute opportunities that may not be available to the larger market.

Q: Which challenges do you anticipate may arise?
A: We think the disruption from Covid-19 could last for a while, despite fiscal and monetary support. This can lead to bouts of volatility and deterioration in some credits.

Q: What opportunities are you expecting?
A: These same bouts of volatility will offer investors who can analyse credit the opportunity to differentiate between investments that have had a genuine credit deterioration from some that may just be lost in the mix and have a positive long-term outcome.

Jasleen Mann