In September 2025, Value Partners hosted a speaker series featuring Faisal Ahamed from Canso Investment Counsel, manager of the VPI Corporate Bond Pool. Faisal shared his perspective on the current credit market environment, portfolio strategy, and the disciplined approach Canso uses to manage risk and identify opportunities.
Market Environment
Faisal described the third quarter as a period of policy uncertainty. He noted that the yield curve has steepened, with long-term rates rising and short-term rates coming down. This shift has made it difficult for businesses to plan ahead, and has contributed to a market where credit spreads remain tight. Investors are not being adequately compensated for risk, as both investment grade and high yield spreads are well below their historical averages.
Pool Strategy
In response to these conditions, Canso has focused on buying higher quality bonds and maintaining a defensive posture. The team is selling positions that were previously entered at wider spreads, taking advantage of current market strength. At the same time, they are prepared to act when market weakness presents new opportunities, but only when the compensation for risk is appropriate.
The Process
Faisal explained that every investment begins with a thorough understanding of the business and its cash flow. The team also evaluates the management of each company, recognizing the importance of leadership in protecting bondholder interests. Stable cash flow and a clear assessment of default risk are essential. Canso’s analysts review trust indentures and credit agreements to ensure deals are well-structured and that the Pool's interests are protected. Internal credit ratings are used alongside agency ratings to help guide portfolio construction.
Fund Characteristics
Currently, the VPI Corporate Bond Pool holds about half its assets in AAA/AA securities, providing liquidity and flexibility. The portfolio yields about 5%, which is not counting the approximately 40% allocated to government funds for capital preservation. Faisal emphasized that the team remains patient and disciplined, focused on protecting client capital and seeking value in high-quality credit.