Managing a credit portfolio across several asset-backed loans (and previously corporate loans), James and the team at Aquasia's enhanced credit fund have returned 6.76% p.a. since inception (October 2011). However March saw the fund have its first negative month, as the fear of COVID-19 saw credit spreads widen and valuations shift. As James highlights, this isn't necessarily a reflection on the assets themselves or an immediate decrease in quality, but more so the price that investors are willing to pay for assets.
James and David discuss the differences between the COVID-19 pandemic and the Global Financial Crisis, with James highlighting the structural causes of the GFC against the temporary economic damages caused by COVID-19 and the global government interventions.
James also explains the stimulus provided by governments to bridge the gap to an eventual COVID-19 solution, the impact of hardship on property prices and the flow-on effect to other asset prices.