The Credit Edge by Bloomberg Intelligence Acadian Sees Quants Moving to Loans, CLOs
22 snips
Feb 19, 2026 Scott Richardson, Director of Systematic Credit at Acadian and author of Systematic Fixed Income, explains data-driven credit investing. He discusses applying systematic approaches to leveraged loans, CLOs and emerging markets. Short takes cover alternative data, trading costs, portfolio construction, private credit myths and uses for LLMs in investment workflows.
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Validate Alternative Data Economically First
- Only add alternative data if you can articulate an economic hypothesis and show empirical additivity.
- Test whether the data actually improves forecasts before integrating it into portfolio construction.
Trading Costs Can Erase Academic Alpha
- Academic factors can look strong but often ignore real-world trading costs and liquidity constraints.
- High turnover strategies must account for spreads and execution costs or alpha evaporates.
Immunize Macro Risks, Target Idiosyncratic Alpha
- Immunize portfolios against macro exposures like country, sector, and interest-rate bets.
- Focus tracking error on idiosyncratic credit opportunities where you are compensated.
