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b'In this episode of\\xa0Strategic Investor Radio, host Charlie Wright interviews Guy Benstead of Cedar Ridge Partners, a Registered Investment Advisor (\\u201cRIA\\u201d) based in Greenwich, Connecticut. \\u201cWe\\u2019re bond guys,\\u201d says Mr. Benstead, in reference to his firm.
Cedar Ridge specializes in unconstrained credit strategies. It operates private funds, separately managed accounts (\\u201cSMAs\\u201d), and one alternative mutual fund: the\\xa0Cedar Ridge Unconstrained Credit Fund\\xa0(MUTF:CRUMX) that make investment decisions based on the firm\\u2019s top-down macroeconomic analysis combined with its \\u201cdeep dive credit work\\u201d on individual securities.
If Cedar Ridge\\u2019s funds were long only, then much of this in-depth research would be for naught, since research can turn up bad bonds just as easily as good ones. Therefore, Cedar Ridge\\u2019s funds operate with a long/short mandate, and with positions spread across about\\xa0100 securities, or so. Benstead points out, however, that this doesn\\u2019t mean the funds own bonds from up to 100 different issuers \\u2013 the positions include several bonds from some of the same issuers (at different maturities).
The funds\\u2019 long portfolios consist primarily of corporate and municipal bonds, along with preferred stock. Their short portfolios are made up of corporate bonds thought to be \\u201coverpriced,\\u201d along with a \\u201ccore Treasury ballast\\u201d to hedge against interest-rate sensitivity.
One thing that separates the Cedar Ridge long/short credit funds with others in the space is that Cedar Ridge doesn\\u2019t use derivatives. Benstead says that Cedar Ridge tends to own the same securities as typical bond investors, but the firm operates like a great chef, arranging the ingredients in a different way.'