Rhode Island Employees’ Retirement System
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Outlook
COVID-19 continues to impact global economic activity following the historic volatility and dislocations in global
markets earlier this year.
We observe growing industry bifurcation, as certain industries have been able to weather the initial impact of
COVID-19 and begin the recovery process, while other industries will likely be changed forever.
We believe that default rates will remain elevated through 2021 and beyond as companies and their investors
realize the full impact of COVID-19, especially in certain sectors such as energy, leisure, and retail.
Our funds entered the crisis defensively positioned and well-hedged, and we have sought to take advantage of the
unfolding opportunity set by deploying substantial capital primarily in high yield long/short, capital structure
arbitrage, and convertible relative value.
The enormous capital demands for COVID-affected issuers has fueled large, multi-part capital raises which we
anticipate will continue to create compelling short and long term investment opportunities.
We continue to believe actively managed relative value investing will outperform and thrive amidst increased
dispersion and likely bouts of volatility which should create many mispricings.
As the opportunity set evolves, we believe our diverse set of strategies will be well-positioned to maintain a strong
hit-rate and positive position return skew, as we have over the past few quarters.
ARISTEIA CAPITAL®
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