Distressed Municipal Bond Strategy

The Principal Street Partners Distressed Municipal Bond Opportunity Strategy applies a distressed investment strategy in the municipal credit market. The objective of the strategy is long-term capital appreciation with a tax-free income component. The strategy primarily acquires bonds in smaller sizes or odd-lots to ensure the best pricing for limited partners, builds positions over time and sells when pricing has improved. The resulting portfolio is diversified across credits, geographies and types of municipal credit as well as uncorrelated to other asset classes.

We seek out the best opportunities based on upside potential and market misperception across sectors, including:

  • MULTI-FAMILY HOUSING
  • ECONOMIC DEVELOPMENT AUTHORITY BONDS
  • STUDENT HOUSING REVENUE BONDS
  • ASSISTED LIVING FACILITY REVENUE BONDS
  • HOSPITAL BONDS
  • GENERAL OBLIGATION BONDS/DISTRESSED MONOLINE INSURANCE COMPANIES
FOCUSED ON SPECIAL SITUATIONS, SMALL UNDISCOVERED BOND ISSUES

— Bonds purchased in the secondary market at broker auctions as opposed to the offering side to achieve the best possible prices
— Purchase investments at substantial discounts to the value the underlying assets would fetch in a worst-case scenario, such as liquidation or bankruptcy
— Invest in securities that are mispriced or otherwise dislocated

EXPERIENCED MUNICIPAL BOND TRADER AND ANALYST

— Manager has spent entire career in municipal bond market
— Manager has managed distressed municipal portfolio for last 15 years

DISTRESSED MUNICIPAL MARKET

— The municipal bond market is a $3.7 trillion dollar negotiated market
— The distressed municipal market is approximately $180 billion in size

NO LEVERAGE

— Unlevered return profile

TAX EFFICIENT

— A percentage of the returns generated are federally tax exempt due to the interest received from the tax-free bonds in the portfolio
— 1-3 year holding periods limits short-term capital gains

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David Weiner

Managing Partner
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Eric Sellinger

Managing Partner
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INFRASTRUCTURE PLUS STRATEGY: Q3 2021 COMMENTARY

INFRASTRUCTURE PLUS STRATEGY: Q3 2021 COMMENTARY

Similar to the majority of the benchmarks we track 3Q21 Performance for Infrastructure PLUS was negative with a total return of -2.6%. The most comparable index, the DJ Brookfield Infrastructure Composite (DJBIA1DOW) also delivered a return of -2.6%. The S&P 500...

INFRASTRUCTURE PLUS STRATEGY: Q3 2021 COMMENTARY

Nov 19, 2021

Similar to the majority of the benchmarks we track 3Q21 Performance for Infrastructure PLUS was negative with a total return of -2.6%. The most comparable index, the DJ Brookfield Infrastructure Composite (DJBIA1DOW) also delivered a return of -2.6%. The S&P 500...