Capital Ideas Podcast Finding durable value in high yield tech & financials
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Feb 4, 2026 Sandro Lazzarini, a fixed-income analyst and portfolio manager focused on high-yield credit in tech and financials. He explains how he values companies in transition. He highlights why terminal value and pricing power matter. He discusses AI-related issuance and the growing role of private credit.
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High Yield Is Often Transitional
- High yield issuers are often companies in transition rather than inherently bad businesses.
- Focusing on why they borrow and their terminal value reveals durability the market overlooks.
Ask Why They Borrowed
- Ask why the company is borrowing and what management or owners' incentives are.
- Size positions when you believe in long-term value even if the market is temporarily wrong.
Terminal Value Beats EBITDA Alone
- Terminal value and pricing power are central to assessing creditworthiness.
- Stable, recurring cash flows allow businesses to sustain higher leverage than EBITDA metrics suggest.