Logan Circle Partners, L.P. (“Logan Circle” or the “Firm”) is a registered investment adviser and began managing assets on November 1, 2007. On September 15, 2017 the Firm became a wholly owned subsidiary of MetLife, Inc. and is part of MetLife Investment Management, MetLife, Inc.’s institutional investment management business. From April 16, 2010 to September 15, 2017, the Firm was a subsidiary of Fortress Investment Group LLC. The Firm continues to operate as Logan Circle Partners, L.P. Additionally, on December 19, 2011, the Firm formed a new subsidiary, Logan Circle Partners I LLC, which is a wholly-owned entity of the Firm. The Firm is defined to include all accounts managed by Logan Circle Partners, L.P. and Logan Circle Partners I LLC. The track record presented represents the team’s performance at Delaware Investments while it managed High Yield Focus strategy from October 1, 2000 (“inception date”) through October 31, 2007. From November 1, 2007 (“creation date”) to the present, the performance presented is for the Logan Circle High Yield Mid-Grade Fixed Income (“High Yield Mid-Grade”) composite that the investment team currently manages at Logan Circle.
Logan Circle claims compliance with the Global Investment Performance Standards (“GIPS®”) and has prepared and presented this report in compliance with the GIPS® standards. Logan Circle has been independently verified for the periods November 1, 2007 to December 31, 2017. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS® standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS® standards. The High Yield Mid-Grade composite has been examined for the periods November 1, 2007 to December 31, 2017. Verification does not ensure the accuracy of any specific composite presentation. The verification and performance examination reports are available upon request.
The High Yield Mid-Grade strategy seeks to produce predictable and consistent excess returns relative to a benchmark with a similar level of volatility by investing primarily in higher quality, below investment grade U.S. corporate fixed income securities. Effective July 1, 2016 The High Yield Mid-Grade composite does not have a minimum account size. From March 1, 2014 through June 30, 2016, the High Yield Mid-Grade composite includes all fee-paying portfolios with assets in excess of $15 million, managed on a discretionary basis according to the applicable composite strategy except as otherwise excluded herein. Prior to March 1, 2014 there was no minimum account size for the High Yield Mid-Grade composite. The Firm maintains a complete list and description of composites, which are available upon request. Policies for valuing portfolios, calculating performance and preparing compliant presentations are available upon request.
Effective August 1, 2011, the High Yield Mid-Grade composite has a significant cash flow policy which is applied consistently and within GIPS® standards. The Firm has chosen to remove accounts that have a significant daily external aggregate cash flow greater than 20%, or monthly flow greater than 50%. If any account meets these thresholds, then the account is removed from the composite. Aggregate cash flow is defined as additions plus withdrawals over the period. Accounts are removed in the month of the significant cash flow. If the significant cash flow is client directed requiring security liquidation that materially affects account management, the Firm will remove the account the month of security liquidations. The account will be reinstated to the composite once the portfolio manager has determined that the flow has not impacted the management of the account and the account is invested as per the strategy. There have been no changes to this policy and additional information regarding the treatment of significant cash flows is available upon request.
The performance benchmark presented from inception date through October 31, 2007 was the Bear Stearns High Yield Index and from November 1, 2007 to March 31, 2012 was the Bank of America Merrill Lynch U.S High Yield Master II Constrained Index. This change was made due to the Merrill Lynch benchmark being the more widely used index for institutional investors. As of April 1, 2012 the performance benchmark is the Bank of America Merrill Lynch U.S. High Yield BB-B 2% Constrained Index. This change was made to better align the benchmark with the composite’s mid-grade focus. The Bear Stearns High-Yield Index included fixed-income, non-convertible, U.S. dollar-denominated securities rated both BB+ and Ba1 or lower with an outstanding par value of at least $100 million. The Bank of America Merrill Lynch U.S. High Yield Master II Constrained Index is an unmanaged portfolio constructed to mirror the high yield debt market. The Bank of America Merrill Lynch High Yield BB-B Rated Constrained Index contains all securities in the BofA ML U.S. High Yield Master II Index rated BB+ through B-, but caps issuer exposure at 2%. All index returns presented are provided to represent the investment environment existing during the time periods shown and will not be covered by the future report of independent verifiers. For comparison purposes, the indices are fully invested and include the reinvestment of income. The indices are unmanaged and unavailable for direct investment. The returns for the indices do not include any transaction costs, management fees or other costs.
Returns are based on fully discretionary accounts under management and may include terminated accounts. The dispersion of annual returns is measured by the standard deviation among asset-weighted portfolio returns represented within the High Yield Mid-Grade composite for the full year. Dispersion is not calculated for composites with five or fewer accounts for the whole period.
Performance returns are presented gross and net of fees, include the reinvestment of all income and are calculated in U.S. dollars. Dividend income has been recorded net of all applicable foreign withholding taxes. Returns calculated gross of fees do not reflect the deduction of our investment management fees. Individual client returns will be reduced by investment management fees and other expenses that the account may incur. The investment management fee schedule for the High Yield Mid-Grade strategy is 0.50% on the first $50 million and 0.45% on amounts from $50 million to $100 million and 0.40% on amounts over $100 million. Net returns have been calculated by reducing the monthly gross returns by the highest stated ADV fee of 0.50%. Fees have a compounding effect on cumulative results. Investment management fees are described in Part 2A of the Firm’s Form ADV. Actual investment management fees incurred by clients may vary.
Past performance is not indicative of future results. The information presented is available for institutional client use only and presented for use only as a one-on-one presentation.
3 YR STDV3
3 YR STDV3
|% TOTAL FIRM
|10/1/2000 (Inception) to 12/31/2000||-0.42%||-0.54%||-5.73%||7||N/A||N/A||N/A||$106,596,571||-|
|2007||3.78%||3.26%||2.28%||≤ 5||N/A||N/A||N/A||$9,810,620||< 1%|
|2008||-19.45%||-19.86%||-26.11%||≤ 5||N/A||N/A||N/A||$6,709,201||< 1%|
|2009||50.61%||49.88%||58.10%||≤ 5||N/A||N/A||N/A||$60,729,562||< 1%|
|2010||14.96%||14.40%||15.07%||≤ 5||N/A||N/A||N/A||$82,840,613||< 1%|
|1Q 2018||-1.32%||-1.44%||-1.11%||≤ 5||N/A||N/A||N/A||$266,027,987||<1%|
|2Q 2018||0.61%||0.48%||0.65%||≤ 5||N/A||N/A||N/A||$265,287,253||<1%|
1 Past performance is not indicative of future results. Net of fee returns reflect the deduction of investment advisory fees and are calculated in the same manner as gross of fee returns. Net of fee returns are calculated using the highest fee rate disclosed in the Firm’s ADV. Fees for separate accounts may be negotiable depending upon asset size and type of account. The performance benchmark for the Logan Circle High Yield Mid-Grade Fixed Income composite is the BofA ML High Yield BB-B Rated Constrained Index, which contains all securities in the BofA Merrill Lynch U.S. High Yield Index rated BB+ through B-, but caps issuer exposure at 2%. For additional benchmark disclosure, please see the full GIPS® disclosures at the end of this Presentation.
2 “N/A” is an indication that the information is not statistically meaningful due to an insufficient number of portfolios (five or fewer) in the composite for the entire year. Standard deviation is only presented for accounts managed for a full calendar year.
3 The three-year annualized standard deviation measures the variability of the composite and the benchmark returns over the preceding 36 month period. The standard deviation is not presented for 2000 through 2010 because it is not required for periods prior to 2011. It is also not presented for quarter-ends.
4 Prior to November 1, 2007, the investment team was part of Delaware Investments and therefore the Firm is reporting the percentage of Firm assets only for all accounts managed by Logan Circle Partners, L.P.
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