Hedge Fund Investing: A Practical Approach to Understanding Investor Motivation, Manager Profits, and Fund Performance

What is the Profile of a Relative Value Manager?

Convertible arbitrage managers can have a unique focus on one aspect of convertible trading such as volatility arbitrage, distressed trading or fundamental credit evaluation or a combination of them all. Tenor Capital Management is one example of an experienced firm operating in this strategy.

Tenor Capital Management

Tenor Capital Management is a Convertible Arbitrage focused hedge fund Management Company that seeks to generate returns for investors in funds it manages that are driven by name-specific events and catalysts. They try to limit exposure to credit, equity, interest rates and fx, which reduces downside risk and return volatility. They focus on the U.S. markets because of the various hedging opportunities. They follow a bottom up fundamental security selection approach, and try to identify under-followed/overlooked investment opportunities in the mid-cap sector. In cases where there are very large potential rewards, they will invest in convertible securities of large-cap companies. Tenor actively restructures its funds’ portfolios as the market risks and opportunities change. The company manages money for both institutional and qualifying individual investors. The firm currently manages over $1 billion, according to company documents.