Scott's Cove Management LLC is an event-driven, long-short credit-focused investment manager. Our objective is to protect capital and to generate compelling absolute returns over all market environments. On the long side, we focus primarily on senior and secured debt of lesser-followed, primarily middle-market U.S. high yield issuers, with particular expertise in distressed situations. On the short side, we seek fundamentally overvalued securities and economically deteriorating issuers, at times augmented by macro hedges to protect our portfolio. Our priority is to invest at the top of the capital structure, with a consistently high allocation to shorter duration, current-interest-paying securities. We believe that our investing strategy tends to result in low correlations to both the equity and credit markets, as well as low volatility. Our performance record, including predecessor firms, goes back over 23 years.
Our priority is to invest at the top of the capital structure, with a consistently high allocation to shorter duration, current-interest-paying securities.
The unprecedented issuance of high yield loans and securities over the past several years has resulted in a large supply of precisely the sort of inefficiently-priced, event-driven, absolute return situations that Scott’s Cove has always focused on, both long and short. While bankruptcies and distressed situations are at a cyclical low, we believe – for both economic reasons as well as overall supply – that an uptick in these opportunities is likely over the next few years. We believe that Scott's Cove's well-proven, consistent and disciplined style; our priority on, and successful history of, protecting capital in all markets; and our experience and historical performance through several economic and credit cycles, combine to validate our focus on generating compelling absolute returns in all market environments, and to add truly differentiated value to diversified institutional portfolios.
The “Scott’s Cove” name is derived from a cove in Connecticut, off of the Long Island Sound. Our founder, Phillip Schaeffer, lived near Scott’s Cove when he first began investing in this asset class. His view – then as well as now, 23 years later – was that investors should come to Scott’s Cove for protection during turbulent, or potentially turbulent, investing periods, just as boats stay near a sheltering cove for protection during storms.