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Jonathan Rochford

Narrow Road Capital is a high yield and distressed credit manager focused primarily on Australian investments. We specialise in non-vanilla, high return credit investments including leveraged loans, high yield bonds, mezzanine debt, convertible bonds, distressed debt and structured credit.

Austerity isn’t Dead, it will Come Back with a Vengeance

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

There’s been a steady stream of recent articles claiming that austerity is dead. This one from James McCormack at Fitch argues that populist politicians are responsible for killing off pragmatic economic policy. Whilst I don’t deny the medium term tide is against austerity, the very high levels of sovereign debt... Show More

Low Returns Ahead for High Yield Debt?

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

A quick pulse check on global high yield debt shows that it is boom time once again. That’s great for borrowers wanting cheap debt with few conditions but bad for long term investors. Firstly, two graphs from Bloomberg on US high yield. The first shows that both investment grade and... Show More

June Market Commentary: Ten Years on What Have We Learnt?

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

Risk assets were mixed in June with equities, credit and commodities all seeing ups and downs. Equities in the China (5.0%), Japan (2.0%) and the US (0.5%) did well, European equities (-3.2%) were down and Australian equities were flat. Investment grade credit saw small gains whilst high yield credit had... Show More

April Market Commentary: Markets are Invincible?

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

Small gains were made in equities and credit during April whilst commodities were mixed. Equities rose in Europe (1.7%), Japan (1.5%), Australia (1.0%) and the US (0.9%) with China (-0.5%) the odd one out. High yield and investment grade credit made small gains as well. US natural gas (2.5%) and... Show More

March Commentary: Markets Take a Breather After “Yuge” Gains

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

The Trump rally took a breather in March with risk assets mixed. Equities were flat in the US and China, rose in Europe (5.5%) and Australia (2.7%) and fell in Japan (-1.1%). US investment grade and high yield credit gave up a small portion of the recent gains. Commodities mostly... Show More

Australian Regulators Share the Blame for Housing Being Unaffordable

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

Australians have rightly applied the blowtorch to their politicians for housing being increasingly unaffordable. The Federal Treasurer, Scott Morrison, has now turned the blowtorch onto financial regulators for their part in the problem. While the majority of the problem is caused by the policy failures of politicians, regulators have ignored... Show More

A worrying development in Chinese infrastructure investment

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

State owned entities in China have a history of taking on large amounts of debt to build white elephant projects. A recent surge in investment by SOEs means Australian investors should consider the current buoyant prices of iron ore and many other commodities to be unsustainable. That does not mean... Show More

Harvard Shows the Pitfalls of Internalising Funds Management

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

The decision by Harvard to terminate half of its investment staff and outsource funds management bucks the global trend to internalise funds management. The underperformance achieved in the last decade came despite Harvard having all the factors necessary to recruit and retain excellent fund managers. Harvard has a great brand... Show More

February Market Commentary: The Only Way is Up?

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

February brought more gains for risk assets and safe haven assets. Equities rose in all major jurisdictions including the US (3.7%), Europe (2.8%), China (1.9%), Australia (1.6%) and Japan (0.4%). Credit made gains across high yield, emerging markets and investment grade. Commodities were mixed with iron ore (9.6%), gold (3.1%)... Show More

January Market Commentary: A Quiet Start to an Interesting Year

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

January was a quiet month for risk assets with President Trump’s first actions far more interesting than markets. The risk/return outlook in the medium term isn’t great for many asset classes, but there’s some signs of better economic conditions in the US which might help 2017 returns. There’s also sections... Show More

The Dallas Pension Fiasco Is Just the Beginning

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

The recent blow-up of the Dallas Police and Fire Pension System was entirely predictable. Whilst it is tempting to blame unusual circumstances for the recent lock-up of redemptions and likely substantial reductions to pensions for those still in the fund, many other American pension funds are heading down the same... Show More

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If Australian Politicians Cared About Housing Affordability Here’s What They Would Do

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

This coming Friday the federal and state treasurers will meet to discuss housing affordability. In recent years there has been no end of empty platitudes from politicians on this issue with little meaningful policy reform. Federal and state politicians prefer to blame each other rather than undertaking basic research and... Show More

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Australian Housing: Bubble or Not?

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

The debate is well and truly on over whether Australian housing is getting bubbly. The media sees its job as to create a conflict so those trying to form a view from reading general commentary could be left thinking that everyone is either a full bubble proponent (see LF Economics,... Show More

If You’re Shocked That Trump Won You Shouldn’t Be Managing Money

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

In the aftermath of the US presidential election Donald Trump’s victory is continuously being called “shocking”. The reality is that the result was not a shock at all. The graphic from Real Clear Politics below is their final prediction of where the states would land, published on the day before... Show More

Central Bank Independence is No Cover for Central Bank Incompetence

Jonathan Rochford
Jonathan Rochford Narrow Road Capital

The wave of criticism of central bankers hasn’t let up in October with a Barron’s article arguing that central bankers are the truly scary clowns. Politicians have joined in the criticism with Theresa May and Donald Trump calling out the negative impacts of current monetary policy. What has changed is... Show More

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