Nolte Says Skybridge Dropped Activists, Bought Structured Credit

Investment Strategy Shifts to Beat Volatility
  • Firm turned over 45% of holdings in fourth, first quarters
  • U.S. economy not likely to fall in recession, he says

Ray Nolte, chief investment officer of Skybridge Capital, says the hedge fund firm turned over about 45 percent of its portfolio, moving away from event-driven and activist bets toward structured credit strategies.

“We shifted to cash flow, cash generating strategies” in the fourth quarter of 2015 and this year’s first quarter, Nolte said in an interview Friday on “Bloomberg <GO>.”

Weakness in energy, which has put pressure on high-yield markets, has spilled into markets for commercial mortgage-backed securities, collateralized loan obligations and structured credit, he said. But those securities have “fine underlying fundamentals as long as the U.S. economy doesn’t go into recession," said Nolte, whose firm manages $12.3 billion.

Nolte said Skybridge, which invests primarily in hedge funds for clients, also slashed its “significant” allocation to activists and funds that bet on corporate events like mergers and acquisitions.

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