Most credit managers take on too much rating, duration, liquidity, and leverage risk in low spread environments, exposing themselves to drawdown risks that prevent them from participating in high return scenarios when spreads widen.
In contrast, Johkim adjusts portfolio construction based on the spread environment, aiming to produce solid returns with liquidity and capital protections when spreads are low (“Preservation-Plus” phase), and produce much higher returns by investing in longer duration and lower-rated credits when spreads widen (“Risk-On” phase). Johkim uses a unique, check-list driven research process called “KreditZen” (also described as the “Toyota Production System of Investment Research”), which fosters continual learning, research standardization, and institutional memory. Johkim incentivizes investors to size up in the “Risk-On” phase when spreads widen and has a mechanism to return capital when they narrow again.
Founder and Portfolio Manager Jatin Kakkar was previously a Senior Portfolio Manager at Q Investments, where he led research and managed the investment committee for over seven years. Learn more about Johkim.