Inflective's Outright Convertible strategy concentrates primarily on long-term investments in convertible securities in which the underlying common stock is considered undervalued, as measured by an internal cash flow analysis.  Inflective also considers the fixed income characteristics of the convertible security and other relevant attributes when considering an investment.

Because the value of a convertible is highly correlated to the value of the underlying common stock, Inflective focuses on the equity component when analyzing the convertible security.  Through comprehensive fundamental analysis, Inflective seeks to exploit an undervalued underlying equity in addition to the favorable risk return profile of convertible securities.  Undervalued underlying equities are often identified by searching for companies with a competitive advantage not yet realized in the marketplace.  Inflective believes that investments in high-quality companies with competitive advantages will produce superior long-term portfolio performance.

A competitive advantage can be derived from various factors, such as superior management, dominant market position, strong barriers to entry, proprietary products and low-cost production capability.  Once identified, a company with a competitive advantage is further subjected to a cash flow analysis which measures historical and projected financial results.  An investment in a company will be considered if the current or potential cash flows generated from the company's competitive advantage are not fully reflected in what Inflective calls the "Enterprise Value" of the company, which is the market value of the company's debt and equity securities less its available cash.

Please feel free to contact us  to discuss how we can customize an outright convertible investment account for you.*

* Individual platforms have minimum asset requirements and may involve investment period lock-ups.

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