The Credit strategy makes investments both in the primary market and in the secondary market. Polo Capital originates and structures its own assets in the primary market and also trades in the secondary market with an opportunistic approach. The Credit strategy aims to hold loans and securities that offer attractive yields and tangible collateral, whose value is above the outstanding debt. The Credit strategy may seek securitization opportunities when warranted.
The strategy may also have exposure to unsecured credit, should the risk/reward equation be attractive.
The investment framework is based primarily on fundamental analysis, focusing on the debtor's cashflow generation, current balance sheet position and the value/resilience of the collateral involved in the transaction. Ratings attributed by credit bureaus are considered in the analytical process but are not main factor for asset selection.
In general, the Credit portfolios are comprised mainly of Brazilian entities and the assets include debentures, bonds, CCBs (CLOs), CCIs (ABSs), CRIs (MBSs), commercial paper, FIDCs (receivable funds), CDBs (CDs) and credit derivatives.