The Credit Edge by Bloomberg Intelligence Sculptor Sees Opportunity in Busted Capital Structures
Sep 5, 2024
Jimmy Levin, chief investment officer at Sculptor Capital Management, joins Bloomberg contributors James Crombie and Irene Garcia Perez, along with credit analyst Stephane Kovatchev. They discuss striking opportunities in funding companies with unsustainable debt loads, viewing it as the best chance in corporate credit recently. Levin highlights expected growth in asset-based finance and potential double-digit returns. The panel also evaluates the resilience of U.S. consumers and the outlook for debt in cyclical industries amid fluctuating interest rates.
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US Consumer Strength and Inflation
- US consumer strength fueled inflation, requiring restrictive monetary policy.
- Excess savings are decreasing, impacting consumer lending.
Sculptor's Investment Strategy
- Sculptor Capital focuses on well-selected credit risk and harvesting complexity premiums rather than trading macro rates.
- They invest in corporate credit, real estate credit, and asset-based finance.
Single-Family Rental Investment
- Sculptor Capital participated in a transaction involving a bank's warehouse financing for single-family rental properties.
- This bespoke transaction allowed them to create safe risk with enhanced returns.