Drew stresses the importance of protecting against macro threats

Thames River manager plans to hedge against a 10% drop in trending markets

Thames River Capital’s Stephen Drew believes implementing robust and active hedging of tail risks will be crucial to successful credit investing this year. The firm’s head of global credit says this year will be about understanding the sensitivities of a portfolio to macro headwinds like sovereign debt problems in Greece, Spain and Italy. Drew says: “Last year, typical hedges were longer-term and trying to protect you against a 20% drop in trending markets. “You were trying to hedge three or four standard deviation events. “This year, even though I will not change my core portfo...