Spotlight on Meaghan Mahoney, Managing Director & Credit Business Leader, Artisan Partners
Global Thought Leader Spotlight
Meaghan Mahoney, Managing Director & Credit Business Leader, Artisan Partners
In my role as the Managing Director and Credit Business Leader at Artisan Partners, I am responsible for the overall management of our Credit platform from a business and investor perspective.
Artisan is uniquely structured as a series of boutiques, with 11 autonomous teams investing across asset classes. I lead a fantastic team of four specialists who are dedicated to the growth and servicing of our US$11.3 billion Credit platform across a global investor base, comprised of sovereign wealth funds, corporate and public pensions, endowments, foundations and family offices.
The Artisan Credit platform focuses on high value-added active management across high yield and leveraged loan markets, with experience in performing, stressed and distressed credit.
Outlook for credit markets
Credit markets have experienced substantial changes in recent years. As central banks around the world pivoted from ‘transitory’ inflation to policy tightening, the implications on credit investors have been profound.
In below investment-grade credit markets, yields remain elevated offering the potential for attractive total returns. While spreads across credit markets have compressed at the headline level in 2024, active managers can continue to find attractive opportunities particularly in lower rated / smaller issue size / “off-the-run” credit markets.
Allocators in credit markets are now faced with a myriad of risks and trends to consider. In particular, the growth of private credit and the rise of liability management exercises (LMEs) / “creditor on creditor violence” have been widely discussed.
At Artisan, we believe these trends create opportunities. The growth of private credit has resulted in a risk transfer of lower quality companies from the public to the private market, helping to reduce default risk for liquid credit investors. In addition, an uptick in LMEs creates opportunities for highly scrutinising investors willing to roll-up their sleeves to potentially find diamonds in the rough.
The implications for sophisticated investors
We believe allocators will continue to increase their exposure to below investment grade credit markets. The ability to potentially generate high single digit returns – primarily from income – for senior debt instruments is attractive, offering a powerful diversifier to equities. For investors willing to dive beneath the surface, there remains considerable value in special situations, lower rated, and smaller issue size credits.
As private credit fundraising continues its breakneck pace and illiquidity premium collapses, we believe that sophisticated allocators will re-evaluate their exposures to the asset class, particularly the direct lending market. What was once an easy decision to trade liquidity for returns has become much more complicated, as pricing and terms converge between public and private credit markets, while default risk continues to shift away from liquid credit towards private credit.
In an era of compressed spreads and “creditor on creditor violence”, active management in credit has never been more important. Those investors with the appropriate expertise to take advantage of the “off-the-run” segment of credit markets may be rewarded with potentially higher returns than the broader market. In addition, while many LMEs may end poorly, on a selective basis we see the potential for significant total return opportunities. The threat of an LME often causes the company’s debt to trade down significantly in the secondary market, creating a “complexity” premium that skilled managers can exploit.
Meaghan will be presenting at Global Investment Institute’s upcoming Family Office Investment Forum - Sydney, taking place on Tuesday, 15 October 2024 in Sydney CBD, New South Wales and the Family Office Investment Forum - Melbourne, taking place on Thursday, 17 October 2024 in Melbourne CBD, Victoria.
To register your interest in attending, click here or for more information email zelda@globalii.com.au.
Meaghan Mahoney, Managing Director & Credit Business Leader, Artisan Partners
Meaghan is a Managing Director of Artisan Partners and a business leader for the firm’s Credit team.
Prior to joining Artisan Partners, she was a senior relationship manager with Polen Capital Credit (formerly known as DDJ Capital Management), a leveraged corporate credit manager. Before that, she was a senior vice president with Great Elm Capital Management, Inc. where she was responsible for investor relations for two publicly traded micro-cap companies. Earlier in her career, Meaghan worked in various roles in marketing, investor relations and business development with investment management firms on the East Coast.
Meaghan holds a bachelor’s degree from Cornell University.
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