- Added 13 new positions. No deal failures;
- M&A market is back to normal; transactions valuations are now more rational than fearful.
- A very active month adding 8 converts, 3 called bonds, 4 M&A deals via bonds and 3 preferreds;
- We remain very comfortable with our portfolio risk and continue to seek US convert “puts” to increase protection to a market correction;
- Performance generated from modest gains across a diversified spectrum of strategies, valuation metrics, sectors, and liquidity events.
FIXED INCOME ARBITRAGE
- Slightly negative performance mainly due to the strong underperformance of CAN vs US bonds at the end of the month, offsetting gains in early June;
- Trump uncertainty and the looming trade war once again led to widening credit spreads;
- No major changes in strategic positioning. We remain tactically short credit and maintain our CAN & US yield curve flatteners and our positioning long CAN vs US.