Michael Brilley is the President and Senior Fixed Income Officer of Sit Fixed Income and oversees the operations and management of taxable and municipal strategies for custom separately managed accounts, private investment funds and mutual funds portfolios. He leads a team of fixed income portfolio managers and analysts. Mr. Brilley is also a Senior Vice President and Senior Fixed Income Officer for Sit Investment Associates. He joined Sit Investment Associates as the firm was establishing Sit Fixed Income Advisors in 1984 – adding taxable and municipal fixed income investment strategies to the firm’s growth equity strategies.
“…Housing bonds are attractive in that, even though they might have a long-stated maturity over 30 years as in the duration of a single-family mortgage, they are really intermediate in duration because people pay down principal and people move and pay off loans. It is a way to invest in longer maturity and longer dated bonds that are really intermediate in duration, so it is a way to get long yields with intermediate risk. For multifamily, these would be apartment buildings typically, as in low income. Again, these bonds would have sinking funds that amortize payoff principal over time there. They also are like a mortgage, except that they are not refinanced like a single-family dwelling.”
Unrated fixed income municipal bonds are also a sweet spot, for specific issuers.
“On education, the two main areas that we invest in are college revenue bonds and also charter schools. The charter schools are one of the main areas of non-rated bonds. In terms of non-rated, a lot of our multifamily investments are non-rated, and those would be often what is generally called a CCRC or a Continuing Care Retirement Community, and that would be a complex that would often have independent living, assisted living, nursing care and maybe Alzheimer’s memory care. A lot of our non-rated bonds are either CCRCs or charter schools.”
Read the entire interview with Michael Brilley, President and Senior Fixed Income Officer of Sit Fixed Income, for the details on his individual fixed income portfolio choices.
Analyst Q&A: Finding a Recession-Proof Sweet Spot
December 31, 2009