Hares Beware: Future Proofing Credit

Many of us know the story of The Tortoise and the Hare, one of Aesop’s timeless fables. The story, originating from Aesop’s collection of fables first told in ancient Greece circa the 6th century B.C., has been retold through the ages to impart a simple but powerful concept: “Slow and steady wins the race.” In our view, the key takeaways are about more than just speed — rather, they highlight the shortcomings of being too reactive, the virtue of persistence, and the rewards of consistency and trusting your instincts.

In today's financial world, these principles are as relevant as ever. Building off our June Market Review, Run Credit, Run!, we remain steadfast in our belief that this market will challenge investors’ resilience going forward. In light of rising macro and geopolitical uncertainty, constructing a multi-asset credit portfolio with an eye toward a materially larger diversification strategy is one of a few proactive approaches to future-proofing a portfolio’s credit exposure. Last quarter, we emphasized the importance of staying nimble across markets and asset classes — just as the tortoise in Aesop’s tale relies on adaptability to outpace the hare in the seemingly uneven contest. The same principle holds for investors in the marathon that is today’s non-obvious market. As a result, we maintain our position of prioritizing carry over convexity as we head into year-end and next year, while acknowledging there may be a need to originate your own carry.

History has taught us that investors often fall into the hare’s trap: chasing quick wins, perhaps overly confident due to past successes, and reacting to short-term gains. But, as the fable reminds us, it is the tortoise’s disciplined, long-term approach that crosses the finish line first. For credit investors, the focus should always be on consistency and the preservation of capital, especially in a rapidly evolving market. This philosophy has been instrumental in future-proofing our platform — through steady investments in team structure, origination, organizational collaboration, and product innovation. It is important to stay focused on each step of the race and avoid complacency, even when growth is rapid or things seem easy.

As Warren Buffett once said, “Beware the investment activity that produces applause; the great moves are usually greeted by yawns.” Like the tortoise, Buffett has long prioritized thoughtful, steady growth and meticulous planning over chasing the latest trends. He has not been swayed by the hares — or, as the market likes to call it, the ‘herd mentality.’

Similarly, we focus on making long-term, fundamentally sound decisions that allow us to stay ahead of market shifts. By developing a dynamic platform with scalable credit and insurance origination, we hope to be in a position to navigate the ever-evolving global landscape and proactively position ourselves for future market shifts. Whether through portfolio construction, evolving investment strategies, differentiated origination and/or continuously refining our risk management processes to support a broader opportunity set, we remain committed to architecting an approach for longevity that maintains the flexibility to stay nimble rather than just prioritizing short-term gains.

With this in mind, we address the following themes that stood out to us this quarter: