Glenview Capital Annual Letter

As always, Glenview Capital, is out with another remarkable annual letter highlighting their diligent investment process and spectacular returns. I have linked to the letter below for your review. In this post, as credit and distressed debt are of the utmost import, I will highlight some takeaways from the letter that revolve around Larry Robbins' discussion of Glenview's participation in the credit markets (with that said, everyone should read the entire letter as it is gold)

• The firm continues "to withdraw capital from long fixed income strategies and redeploying capital in long equity strategies with superior risk/reward characteristics." Very similar line of thinking that I have employed in the past 6 months. The upside / downside trade in on-the run credit is just not there right now outside of a few sparse situations, whereas in equities, a number of sectors/classifications look attractive
• Corporate fixed income portfolio winning names: Cengage, MWA, MBIA, TSTR, Fox Acquisition Sub, Local TV and Ceridian. MBIA was such a huge winner for a number of funds last year. The AA CDS year tightened 1200 bps from the peak in June and the AAA CDS tightened nearly 2000 bps from June to year end.
• Discuss the shape of the treasury curve and how the roll down effects will affect REIT valuations going forward
• Glenview goes on to discuss how "healthy" the credit markets are by referencing that issuers are marketing holdco PIK toggle bonds inside 11% - frothy = healthy here IMO

Go here to read more of the 2010 annual letter for Glenview Capital.