Investment Style

Coolabah aims to make money from identifying mispricings — not from taking additional risks.

Coolabah specialises in identifying mispricings (“alpha”) in high-quality, highly liquid bonds. We look for securities trading away from what our models say they are worth, buy them, and aim to profit as the mispricing disappears. This is different from driving returns through taking on more risk such as interest rate risk, credit default risk and/or illiquidity risk.

Alpha vs Beta

Most fixed-income managers lift returns by taking on more risk — lending to weaker borrowers, locking money away for longer, or betting on the direction of interest rates. The industry calls this “beta”.

Coolabah works differently. We hedge out interest-rate risk rather than bet on it, we hedge all currency risk, and we concentrate on the most liquid global bonds. Our edge comes from our ability to identify mispriced bonds — “alpha” — rather than leveraging off traditional risk levers.

Our mantra is simple: every basis point counts.

What sets Coolabah apart

Alpha-focused investment approach – Generates returns by exploiting pricing inefficiencies in liquid, high-grade credit and sovereign securities rather than relying on duration, credit or illiquidity risk.
Advanced quantitative research – Combines proprietary models, data science, artificial intelligence and rigorous quantitative analysis to identify mispriced opportunities.
World-class analytical capability – Extensive credit research and intensive financial and commercial due diligence underpin every investment decision.

Active security selection – Disciplined top-down and bottom-up bond pricing and portfolio construction focused on assets trading below fair value with strong potential to converge.
Risk-conscious investing – Seeks to maximise risk-adjusted returns while minimising credit risk, interest rate duration risk and unnecessary portfolio complexity.
Recognised thought leadership – Expertise is regularly sought by governments and market participants on complex economic and financial market issues.
Track record of innovation – Developed pioneering research and market models, including Australia’s first hedonic RMBS default index and forecasting models with a history of anticipating major market and economic developments.
Focus on liquid credit – Believes liquid, low-duration active credit strategies provide an attractive source of alpha for both institutional and individual investors, particularly in volatile interest rate environments.

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