“ I would rather rely on my relationships and my own maths to make sure that we ' re getting the right execution .”
ask five out of ten guys , probably five of those ten won ' t stand up to anything they send out . Information leakage is key . I don ' t want to go out there on a whim and ask someone because they might just pass and say I don ' t want to trade that , because then they ’ ve got all my information .”
Also falling under the team ’ s developed markets umbrella is the convertible bonds book of business . This is another instrument that relies heavily on relationships , despite orders usually coming to market in smaller size than credit . Convertible bonds are a hybrid of bonds and equities . After buying
PHILIP STEEL the bond , its new owner has the option to convert that into equity in that company in the future should they wish to do so . It ’ s a cheaper way for companies to raise money because they don ’ t have to pay as much coupon because they ’ re potentially having to give away equity at the end of that bond ’ s life .
“ In reality , that [ conversion ] doesn ' t really happen because we ' re not in it to own part of the company ,” confirms Steel . “ We ' re in it to get the uplift of an equity rally . The convertible bond will participate in that whilst also protecting against an equity crash because it has a fixed income portion as well .”
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