RMB Capital Management

Overview

Our tax-exempt fixed income strategy centers on capital preservation. We believe we can grow income in the long term by selectively purchasing national, highly rated bonds that offer low risk.

Performance Objectives

  • Steady income from short- and intermediate-term bonds
  • Low total return volatility

Investment Approach

  • Fundamentally driven, relative value strategy
  • Bias toward general obligation and essential service revenue bonds
  • Avoid troubled regions with deteriorating demographics and headline risk

Portfolio Profile

  • Highly liquid portfolio with national tax-exempt bonds rated AA or higher
  • Non-callable bonds or bonds with narrow call windows
  • Primarily bonds maturing in 10 years or less with coupons of 4% or greater
  • Diversified by issuers, geographic locations, and revenue sources

Philosophy

With an eye on the long term, our fixed income philosophy focuses on researching, analyzing, and investing in a uniquely diverse range of tax-exempt bonds. Through our fundamentally driven, value strategy approach, we aim to preserve capital and grow income.

Our tax-exempt fixed income strategy is distinguished by three key tenets.

Quality

  • In our view, risk is underpriced when things are going well, and our analysis adjusts for this bias
  • We examine potential event risk, including economic shifts and political changes

Liquidity

  • National tax-exempt bonds
  • Active secondary market supported by dealers and electronic networks

Concentrated Portfolio

  • Assures our clients’ assets are focused in our best ideas while still being adequately diversified
  • Enables us to thoroughly research each holding

Process

We have a disciplined and rigorous approach.

Idea Generation

  • New issue and secondary markets are screened for best opportunities
  • Results are analyzed on tax-free and taxable equivalent yield basis

Fundamental Analysis

  • Identify issuers with stable financials and robust local economies
  • Examine financial ratios for low overlapping per-debt capita, high unrestricted fund balances
  • Proprietary research database for ongoing analysis

Portfolio Construction

  • Equally weighted portfolio containing between 10 and 20 holdings
  • Low turnover; bonds typically held to maturity
  • Utilize a proprietary software application to evaluate portfolio construction pre-trade