Kennedy Lewis manages an opportunistic credit strategy that was formed to target idiosyncratic investments. Given the manager’s proprietary sourcing and closed-end fund structure, its investment strategy is agnostic to the market, geography and security type. The manager can be patient and nimble in its capital deployment. The manager’s investment approach is to construct a portfolio of “best ideas” that are expected to produce a minimum 1.5x MOIC over the life of each investment, while acutely focusing on capital preservation. This is achieved through portfolio diversity, security selection, structure and seniority.
The Kennedy Lewis investment strategy is to focus on event-driven situations in which a catalyst may unlock value independent of overall market movements. The fund will generally target middle market companies that are facing some form of disruption. These investments will typically be associated with companies that have unsustainable capital structures and/or lack access to traditional sources of capital. Through a rigorous deep fundamental credit approach, complemented by established sector views, the construction of the portfolio will concentrate on investments in sectors where capital can be deployed tactically to provide capital structure stability or at times fund growth. The fund’s investments tend to be highly structured, are often associated with complexity, have the presence of ample asset coverage and generally require a contrarian mindset.