Updated takes on Canyon Partners?
Hey guys - wanted to get some updated perspectives on Canyon. For a shop of its size there's remarkably few mentions here on WSO. Anyone have any recent information about their flagship performance, strategy, types of candidates they recruit, headhunter, etc.? They seem to pursue a really open-ended, opportunistic mandate so I'd be curious for any insight on how they silo people and so forth.
Have some very sharp investors there. Strong long term track record but very tough March so we’ll see where that leaves them. Mostly recruit from other funds vs. from banking which probably explains the more limited mentions on here.
Thanks, that's helpful.
Canyon is at its core a large distressed credit hedge fund. Credit funds like Canyon all have pretty much the same various sleeves and fund types - Distressed debt lock up funds (long only), long/short credit hedge, CLOs, liquid HY (though not Canyon) and maybe some private credit sleeve. Goldentree, Brigade, Avenue - these sorts of places all have the same basic structure with more granular differences in AUM splits and culture etc. They do recruit from banking but typically RX places and Moelis in LA (other RX in LA too). The rest is from other credit hedge funds of course.
on Silos, it’s pretty much the CLO guys and then guys who work on all the other high octane stuff. regional offices may not have this bifurcation (like London doesn’t).
Awesome insight, thank you!
For what it’s worth, I do believe they recruited an analyst/associate or two from Moelis FIG NYC who at least one of them was kinda involved with distressed stuff a bit but I believe mainly FIG stuff there. Now I believe he mainly does FIG credit-type investing for them though I understand they do have a sizable equity investment practice he may have been and/or is still involved with last I connected with him
Rough start to the year but they (historically) tend to navigate client capital well during volatile times. Funny headline out of VW: "Canyon Capital apologizes for performance; tells investors "Through October 1, 2020, existing investors will be able to invest additional capital with more favorable fees.""
Like most credit hedge funds (as the guy above mentioned with Avenue, GTree etc), they are multi strategy in nature meaning if you can find a bond that is pricing at 10% that should rerack to 6 or an equity that's trading with credit like qualities (fcf yield / return of capital / downside protected) or buying up senior secured at 70 and cramming down jrs, they will participate in any and all trades.
Quick 2 questions. Can you explain a bond 'reracking to a 6'? I've never heard that before, do you mean refreshing/retuning the pricing with new credit metrics? Also, how you do know that an equity has credit-like qualities in terms of downside protection? Are you looking at equity subordination in the bond indentures, or the stock's prospectus itself? Thanks,
Rerack at 6 means the bond trades to a yield to maturity of 6% from 10%. Depending on the years to maturity of the bond that can present a mid teens or higher return potential (i.e., in a simplistic example of a bond gets issued with 5 years to maturity at a 10% coupon at 100 with no-call for the whole lifecycle of the bond, if it rerack to 6% yield then it would trade to ~115-120 giving you 15% - 20% price appreciation plus whatever coupon you get over the holding period.
2021 bump
The interactions I have had with Canyon have mainly been nyc people/office and specifically mainly the FIG guys there. Generally friendly firm. Recently upgraded office space to a very nice new location in manhattan and seem to have plenty of room to grow their presence in nyc. Founders I believe moved to Dallas/Texas but kept LA office. I haven’t seen the fund too active in the news lately besides maybe an interview I think Josh did with Eric Schatzker at BBG about some recent distressed stuff maybe. It was a nice interview overall that I think they did from Canyon’s then fairly empty nyc office. Still regarded as a solid fund in the distressed space from what I know but seems to have gotten involved with some of the SPAC business recently. I think their CIO Todd Lemkin joined the board of one of Ken Moelis’s Atlas Crest SPACs, maybe even the one that merged with Archer Aviation. Since he joined I think Canyon may have been more active in the SPAC market. For what it’s worth, they were active in an activist investment in Navient in 2019 and I think a chemical company in 2020, both had to do with potential M&A actions the company was contemplating I believe. Im happy to try to provide more color if I can, but I figure this may be enough of a start for now. I hope this helps :)
Reviving this thread. Anyone familiar with them have an update given the departures at the top and settling into the move to Dallas (i.e., performance, recent strategic focuses, junior turnover, comp, etc.) ?
Not worth touching with a 10 foot pole, it (has) imploded
Thanks for the heads up.
Do you know what blew them up?
What’s going on with Canyon?
fund managers don't usually do this when they're doing well:
https://www.bloomberg.com/news/articles/2022-11-04/canyon-partners-is-s…
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