KDP Credit Strategy Loan Allocation

The KDP Credit Strategy Loan Allocation, part of KDP's multi-asset KDP Credit Strategy, actively manages senior secured, floating rate loans applying the credit discipline of KDP's industry and market analysts and relying on the experience of our seasoned portfolio management team. The KDP Credit Strategy Loan Allocation seeks to provide a high level of current income with emphasis on principal preservation by investing in better-quality (target weighting of Ba3/BB-) high yield loans. The strategy seeks to produce superior long-term performance with low volatility.

INVESTMENT OBJECTIVES

  • Provide a high level of current income with emphasis on principal preservation investing in better-quality high yield loans
  • Employ an investment approach focusing on fundamental analysis and active portfolio and risk management
  • To produce superior long-term performance with low volatility
  • Benchmark: Credit Suisse Institutional Leveraged Loan Index

INVESTMENT GUIDELINES

  • Bottom-up, value-driven investment selection process
  • Focus on better quality segment of the high yield loan market: target rating of Ba3/BB-
  • Strategy may purchase Leveraged Loans with KDP Default Risk Ranks of lower than 3/5 (B3/B-) provided they have a KDP Leveraged Loan Recovery Ranking of A (100% Expected Recovery)
  • Focus on larger companies – Typically > $100MM Cash Flow (EBITDA)
  • Conservative portfolio management style - emphasis on diversification with issuers <5%, industries typically <15%