Red Cedar's investment approach
Our ability to seek opportunities across a wide range of asset classes with an experienced team is the most important driver of performance
Red Cedar Investment Management believes that a rigorous, fundamental investment process which focuses on the most attractive securities in the income universe can help produce improved risk adjusted returns for clients. Further, we believe that income is the primary driver of fixed income returns over time and that superior performance can be achieved by finding cheap cash flows via a fundamental value approach.
Our flexibility, nimbleness and ability to use a wide range of asset classes provide us with more opportunity to find value than is the norm. This can result in our ability to find opportunities under the radar of larger competitors, and unique potential for our firm to add alpha to client portfolios.
We believe the preferred market can provide opportunities for both attractive income and total return strategies that can be often overlooked. It is a unique asset class, which falls in the middle of a company’s capital structure. Preferreds offer a variety of advantages over common stocks and high yield debt including:
- Low correlation to traditional asset classes
- Yield Advantage to traditional securities
- Opportunities in an inefficient sector
The preferred market is complex and evolving. It will require an increased level of experience and analytical oversight to meet performance expectations. Continuous monitoring of the various preferred structures along with changing business dynamics create the need for experienced management of this sector.
Our preferred securities research and expertise is one of the core strengths of our firm. The Red Cedar team has been involved in managing portfolios utilizing preferred securities as an asset class since 2002.