In this fireside chat, Grant Nachman, Founder & Chief Investment Officer of Shorecliff Asset Management Co., shared his insights on building a team in the performing credit space. He discussed his background, the journey of setting up his firm, the importance of authenticity, and how sizing and credit picking influence investment decisions.

Timeline

2001: Graduated from college and started career in private equity
2008: Worked on troubled assets during the financial crisis
2018: Joined Oaktree Capital Management
2023: Launched Shorecliff Asset Management with a focus on performing credit

Key Takeaways

Authenticity is key: Be true to yourself and your team’s strengths and weaknesses when building a business.

Sizing matters: Aim to be big enough to be relevant but nimble enough to generate alpha, with a cap of $3 billion for Shorecliff’s initial strategy.

Credit picking is crucial: Focus on credit picking and have a team that can work together to make informed decisions.

Generally underweight sectors with high asset volatility: Often underweight sectors like commodities and retail where asset volatility is high.

Look for people with a mindset of controlling risk: Hire team members who are thoughtful, have perspective, and are willing to think beyond their own time horizons.

Technology can improve workflow: Leverage technology to outsource data entry and focus on hiring credit pickers who can think critically.

Hold cash in uncertain times: In times of high volatility, consider holding cash to maintain optionality and deploy capital when opportunities arise.

Key timestamps:

00:08: Introduction to ION Influencers’ Fireside Chats
00:46: Grant Nachman’s Background
01:35: Life in the Markets
03:28: Decision to Set Up Own Firm
05:27: Crafting a Message for the Market
07:13: Identifying an Anchor Investor
08:10: Aligning with Investor Values
09:51: Interest in Performing Credit
10:45: Determining the Right Niche
13:25: Sector Selection
16:22: Building a Complementary Team
18:53: Risk Management and Due Diligence