High Income Marketable Alternatives

Elana Margulies-Snyderman:Hello and welcome, to the Eisner Amper podcast series. I'm your host, Elana Margulies-Snyderman, and with me today is Floyd Tyler, President and CIO of Preserver Partners, a Memphis-based investment manager focused on high income, marketable alternative portfolios. Tyler, a former partner at Gerber Taylor Capital Advisors will share his views on investing in high income marketable alternatives portfolios, where he sees the greatest opportunities and challenges, how the firm integrates DEI, and more. Hi, Floyd, thanks for being with me today.
Floyd Tyler:Oh, thank you for having me. I appreciate it.

EMS:
Absolutely. Floyd, to kick off this conversation, tell us a little about your firm and how you got to where you are today.
FT:Sure, sure. So we're based in Memphis, as you said. We are Preserver Partners and we manage private funds as well as a mutual fund or high net worth and institutional clients, primarily in the southeast, but we certainly have clients in other parts of the country.
How I got here, I spent some time as a Investment Consultant and Head of Research doing institutional consulting for a mid-market consulting firm. And prior to that, I was a Finance Professor at the University of Memphis.
EMS:Very interesting background. Floyd, giving your focus on investing in high income marketable alternatives portfolios, I would love to hear your outlook for this space.
FT:I think it's really interesting. I mean, I think in terms of what's happening in terms of the higher rates, the dislocations that are occurring in the markets, it's creating lots of opportunities in marketable alternatives. We benefit a lot from floating rates. We benefit a lot from dislocations, our ability to be a capital provider to investors who need capital, who need space or capital to grow their businesses or to grow their credit facilities. So it's a really interesting time to be an income investor. It's only getting better from here.
EMS:Absolutely, Floyd. And what more specific opportunities do you see in the space?
FT:So we've been investing quite a bit in areas where we think we can make money this year as well as make money next year in possibly a slower-growing or recessionary environment. So strategies where there's contractual income, it's longterm lease payments, things like that are where we're finding the most opportunities. So things like rail car leases or leases on inland marine vessels, think tug boats and barges. We also see some really interesting opportunities in trade receivables or e-commerce receivables. So all of those strategies benefit from contractual income. It's stable, it's uncorrelated to traditional stocks and bonds, and the income yields are really attractive.
EMS:Floyd, to shift gears a little bit, and you mentioned possible recession, on the heels of that, where are some of the greatest challenges you're facing and why?
FT:Well, just in terms of the recessionary environment, I think any credit investor is going to be concerned with what happens to the credit trajectory of the economy and to their underlying investments. So credit becomes more challenging, I think, in a recessionary environment. So that's an issue.