Navigating the Private Credit Market – Calamos Investments – 10.17.23

Overview:
Title: Navigating the Private Credit Market
Date: Tuesday, October 17, 2023
Time: 2:00 PM Eastern Daylight Time
Duration: 1 hour

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Summary:

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The private credit asset class is virtually as diverse as the global economy, but many investors rely solely on direct lending’s corporate credit risk to generate returns. What are some of the private credit strategies that may help your clients diversify risk, generate resilient yield streams, and dampen overall portfolio volatility?

Join us to hear from Calamos Investments, a leader in liquid alternatives, and Aksia, a global leader in private credit, as their experts weigh in on the private credit market and more.

Topics to be covered include:

  • An update on the private credit market today
  • The full breadth of the global private credit market, which extends beyond direct lending
  • How the Calamos Aksia Alternative Credit and Income Fund (CAPIX) is positioned today seeking to capitalize on this exciting but evolving asset class

Speakers:
Tod Trabocco, CFA Tod Trabocco, CFA Managing Director, Private Credit Strategist Aksia

Tod is a Managing Director on the Investment Research team and has over 25 years of industry experience. He is actively involved throughout the investment process including sourcing, screening and evaluating private credit primary, secondary, co-investment and SMA investments. Tod also works with the Portfolio Advisory team and Aksia’s global institutional clients on portfolio strategy and construction and related investment advisory activities.

Prior to joining Aksia in 2022, Tod was the Head of Product and Strategy at Industrial Transportation Equipment Management (“ITE”), where he assisted existing and prospective limited partners in underwriting and monitoring ITE’s niche transportation asset offerings and designed bespoke co-investment vehicles for some ITE’s largest clients. Before that, he led Private Credit manager research and selection globally at Cambridge Associates, working with advisory clients in launching, developing and monitoring private credit programs. In addition, he chaired the firm’s Credit Investment Committee. Prior to joining Cambridge Associates, Tod worked at Kayne Anderson Capital Advisors and LBC Credit Partners (acquired by CIFC), a credit opportunities/direct lending fund where he led underwriting for almost a decade and sat on the firm’s Investment Committee. Tod started his career at European Bank for Reconstruction and Development.

Tod graduated from Pomona College with a BA in Government and holds a MALD in Development Economics from The Fletcher School, Tufts University and an MBA in Finance and Accounting from Columbia Business School. He is a CFA charterholder.
Robert F. Behan, CFA Robert F. Behan, CFA Executive Vice President, Chief Distribution Officer Calamos Investments

Robert F. Behan leads Global Distribution, which includes the firm’s Intermediary, Institutional, International, and Strategic Partner channels. His duties include distribution, market analysis, and product optimization, selection and placement. Bob serves as Vice President to the Calamos Investment Trust.

He joined the firm in 2007 and has 35 years of industry experience. He has extensive industry experience in several senior positions including Vice President – Head of Sales for Citizens Advisers, Vice President – Head of Institutional Northeast Distribution for Strong Capital Management, and Vice President–Large Market Institutional for CIGNA Retirement and Investment Services.

At each of his prior firms, Bob attained #1 producer status, and at age 29 was the youngest person to join CIGNA’s prestigious “Gold Circle.” Bob is frequently sought out for his insights on trends in the financial services industry. He has recently been quoted in Ignites, Fund Action, MFWire, and Pensions & Investments. He received a B.A. in Economics from Syracuse University and is also a CFA charterholder.
FOR INVESTMENT PROFESSIONAL USE ONLY

Before investing carefully consider the fund’s investment objectives, risks, charges and expenses. Please see the prospectus and summary prospectus containing this and other information which can be obtained by calling 1-866-363-9219. Read it carefully before investing.

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. Opinions are subject to change due to changes in the market, economic conditions or changes in the legal and/or regulatory environment and may not necessarily come to pass. This information is provided for informational purposes only and should not be considered tax, legal, or investment advice. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations.

General Economic Conditions and Recent Events. Difficult global credit market conditions have adversely affected the market values of equity, fixed-income, hard assets, and other securities and these circumstances may continue or even deteriorate further. The short-and longer-term impact of these events is uncertain, but could have a material effect on general economic conditions, consumer and business confidence and market liquidity. Investments made by the Adviser are expected to be sensitive to the performance of the overall economy.

Direct Lending. The Adviser may invest in directly originated senior secured loans, including unitranche loans, of performing middle market companies. The value of the Adviser’s assets is volatile and may fluctuate due to a variety of factors that are inherently difficult to predict and are outside the control of the Advisor and Sub-Advisors, including prevailing credit spreads, general economic conditions, financial market conditions, domestic or international economic or political events, developments or trends in any particular industry, changes in interest rates, or the financial condition of the obligors of the Adviser’s assets.

Direct Origination. A significant portion of the Adviser’s investments may be originated. The results of the Adviser’s operations depend on several factors, including the availability of opportunities for the origination or acquisition of target investments, the level and volatility of interest rates, the availability of adequate short and long-term financing, conditions in the financial markets and economic conditions. Further, the Adviser’s inability to raise capital and the risk of portfolio company defaults may materially and adversely affect the Adviser’s investment originations, business, liquidity, financial condition, results of operations and its ability to make distributions to its investors.

Loans. Loan interests generally are subject to restrictions on transfer, and the Adviser may be unable to sell loan interests at a time when it may otherwise be desirable to do so or may be able to sell them only at prices that are less than what the Adviser regards as their fair market value. Accordingly, loan interests may at times be illiquid. Loan interests may be difficult to value and may have extended settlement periods, which expose the Adviser to the risk that the receipt of principal and interest payments may be delayed until the loan interest settles.

Secured Debt. Secured debt holds the most senior position in the capital structure of a borrower. Secured debt in most circumstances is fully collateralized by assets of the borrower. However, there is a risk that the collateral securing the Adviser’s loans may decrease in value over time, may be difficult to sell in a timely manner, may be difficult to appraise, and may fluctuate in value based upon the success of the business and market conditions, including as a result of the inability of the borrower to raise additional capital. Also, substantial increases in interest rates may cause an increase in loan defaults as borrowers may lack resources to meet higher debt service requirements.

High Yield, Low-Rated or Unrated Securities. Debt securities (including bonds) and preferred stock in which the Adviser invests may or may not be rated by credit rating agencies. The values of lower-rated securities (including unrated securities of comparable quality) fluctuate more than those of higher-rated securities because investors generally believe that there are greater risks associated with them. The inability (or perceived inability) of issuers to make timely payment of interest and principal would likely make the values of the securities more volatile and could limit the purchaser’s ability to sell the securities at prices approximating the values it had placed on the securities. In general, the market for lower-rated or unrated securities is smaller and less active than that for higher-rated securities, which can adversely affect the ability to sell these securities at favorable prices. In addition, the market prices of lower-rated securities are likely to be more volatile because: (i)an economic downturn or increased interest rates may have a more significant effect on the yield, price and potential for default; (ii)past legislation has limited (and future legislation may further limit) investment by certain institutions in lower-rated securities or the tax deductibility of the interest by the issuer, which may adversely affect the value of the securities; and (iii)it may be difficult to obtain information about financially or operationally troubled issuers. The Adviser will not necessarily dispose of a security when its rating is reduced below its rating at the time of purchase.

Unsecured Loans. The Adviser may make unsecured loans to borrowers, meaning that such loans will not benefit from any interest in collateral of such borrowers. Liens on such a borrower’s collateral, if any, will secure the borrower’s obligations under its outstanding secured debt and may secure certain future debt that is permitted to be incurred by the borrower under its secured loan agreements. The holders of obligations secured by such liens will generally control the liquidation of, and be entitled to receive proceeds from, any realization of such collateral to repay their obligations in full before the Adviser. In addition, the value of such collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from sales of such collateral would be sufficient to satisfy the Adviser’s unsecured loan obligations after payment in full of all secured loan obligations. If such proceeds were not sufficient to repay the outstanding secured loan obligations, then the Adviser’s unsecured claims generally would rank equally with the unpaid portion of such secured creditors’ claims against the borrower’s remaining assets, if any.

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