Asset-backed securities cover a wide range of underlying assets and encompasses multiple asset classes, outside of RMBS, CMBS and CLOs. These assets vary from auto loans to consumer loans to aviation to name a few.
They can provide a compelling mix of risk exposure and risk mitigation for investors. These securities are collateralized by underlying pools of assets and incorporate structural protections, reducing credit risk while offering premium yields to comparably-rated corporate debt instruments.
We believe there are significant opportunities in this sector, specifically within the aviation ABS universe, due to market mispricing of pandemic-impacted industries.
Opportunities and Trends
Axonic seeks out mispriced and event-driven opportunities in the ABS market, particularly where high barriers to entry reduce demand for attractive opportunities. Structural complexity serves as an additional barrier to entry which preserves a larger market share of Axonic.
The post-pandemic economy has provided expansive event-driven opportunities in this space. Aviation was one of the hardest hit sectors in 2020 and has since demonstrated long-term resilience. Axonic believed the market overreacted to pressures on the aviation industry in the immediate aftermath of COVID and we were able to add exposure at distressed prices. Axonic’s industry expertise and relatively longstanding activity in the sector provided Axonic investors with early exposure to recovery opportunities.
Our broad access to sourcing and deal structuring provides not just a compelling pipeline of ABS securities but an informational advantage for our investment team.
We focus exclusively in the structured credit space and have since the inception of Axonic. We pass this edge on to our investors with fixed income investments that often provide enhanced returns and diversification away from the broader public markets.
Most of our executive leadership team has been together since the inception of our firm. This provides our investors with a cohesive client experience and a unique business model that has withstood market ups and downs.
An unwavering long-term view is critical to overcoming the inevitable highs and lows in market cycles. Remaining calm, relying on data and resisting the urge to react from emotion is what makes Axonic exceptional.
Combined, our firm has hundreds of years of experience in structured credit. No one is a generalist; we are all focused on our specific practice sectors that gives our team the potential of surpassing the broader markets.
For more information about our historical performance and examples of investment opportunities, please contact us. Please note this information is only available to accredited investors and qualified purchasers.