A Step into Fixed Income with Randy Steuart, CFA

December 1, 2015

I am pleased to announce that Randy Steuart has joined Ewing Morris & Co. as Fixed Income Portfolio Manager.  Prior to joining us, Randy was a Portfolio Manager at Norrep Capital Management, a boutique Canadian mutual fund company.  At Norrep, Randy managed the firm’s $300mm in fixed income assets, which consisted of investments in the high yield corporate bond and senior loan market.  Randy received a Bachelor’s of Commerce degree in Finance from the Sauder School of Business at the University of British Columbia in 2007 and became a CFA Charterholder in 2011.  Randy is also Leslie Wong Fellow, having participated in UBC’s Portfolio Management Foundation during his time at Sauder.

Randy is analytical, creative and business-minded.   I asked Randy to share some of his thoughts on our blog:

Q: Why did you join Ewing Morris?

A: A key professional goal of mine was to ultimately find the right group of exceptional and entrepreneurial people to create a fixed income-oriented investment partnership that would be completely consistent with my personal investment philosophy.  Over the years, I have watched John and Darcy create a remarkable, investment-focused firm with an excellent circle of limited partners.  The scope and scale of their achievement is a significant feat.  Through studying their investor letters and getting to know the team very well, I learned just how similar we were in terms of investment philosophy and how we also share the same personal and professional values.  It is a truly special thing to be able to find a firm where all these factors align and I feel very fortunate and excited to be aboard.

Q: What made you choose high yield fixed income as your investment field?

A: Investing in the high yield bond space was always very intriguing to me because it is an area of investing that is quite cross disciplinary, combining company fundamental, legal and security analysis all into each investment decision.  I also felt that investing in an asset class that is a hybrid of the traditional fixed income space and the equity space could http://Meet-Babes.com yield a very flexible skillset in case I wanted to move in either direction as my career progressed.  On the topic of career progression, no discussion would be complete without a reference to some good luck; though there may have been other, more circuitous routes into high yield investing, the fact that Marret Asset Management (a specialty high yield fixed income manager) was looking for a corporate credit analyst when I was graduating was extremely fortuitous for me from many perspectives.

Q: What do you find is the most common misperception about high yield investing?

A: A common question I receive from others is “aren’t high yield bonds really risky?”  When I hear this question, or its variants, I firstly take great satisfaction that there are perceptions like that out there, because misperceptions contribute to bonds being mispriced, and that is a great thing for what I do, but the perception that all high yield bonds are risky or riskier than stocks is far from the truth.  A mentor of mine used to say, “when you look at a high yield bond, look at it as if it were a stock with a high dividend and then see what you think about it.”  This more flexible perspective was very illuminating to me.  After this moment, whenever I looked at a company, I would compare risk/reward profiles of its bonds against other investments in the company’s capital structure such as loans, preferred stock and common stock.  Through doing this, I learned how high yield could be a very attractive and potentially lower risk place to invest because of its cheaper valuation and often superior risk-reward relationships than in securities of other asset classes.

Q: How do you approach achieving success as an investor and as part of a team?

A: I will borrow an ethos that I recently acquired from Charlie Munger, which is that the best way to become successful is to deserve to be successful.  For me, only when success and trust is truly deserved, does being successful and being trusted become gratifying in its experience.

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