Unlocking Value in the Municipal Market

The municipal bond market is uniquely fragmented and diverse, creating structural inefficiencies that present compelling opportunities for our high-quality Active Relative Value (ARV) strategy.

Deep-Rooted Market Inefficiencies:
An Investor's Opportunity

Two factors offer compelling high quality total return opportunities with less volatility than more aggressive lower credit and interest rate betting strategies.

Factor #1

Over 75,000 Unique Issuers

With over 75,000 distinct issuers, the municipal market offers a vast and fragmented landscape. This lack of uniformity provides significant advantages:

  • Customization and Negotiation: We find excellent opportunities to customize structures and negotiate favorable yields.

  • Unique Market Patterns: Unlike a uniform market, supply is not consistent. Seasonal and state-specific patterns offer valuable entry points and pricing opportunities.

  • Discounted Prices: The sheer volume of issuers and the limited resources of some broker-dealers can lead to a lower risk tolerance, creating discounted prices that we can capitalize on.

Factor #2

Widely Differing Participants

The diversity of market participants creates a complex environment with varying motivations and valuations. This dynamic landscape is a key driver of our strategy:

  • Diverse Investor Base: From retail investors and institutional funds to traditional and non-traditional players, the market's participants have different goals and approaches.

  • Altered Valuations: The presence or absence of specific buyers and sellers can dramatically alter valuations, creating opportunities for those who understand these dynamics.

  • Yield Curve Inefficiencies: Differing ownership interests across the yield curve create numerous inefficiencies to exploit mispricings and enhance returns.