(Adds bond yields in seventh paragraph.)
April 16 (Bloomberg) -- Martin Fridson, a former top-ranked analyst specializing in high-yield bonds, is teaming up with Michael Livian and Richard Lehmann to start an investment firm managing money for wealthy investors.
Lehmann, Livian, Fridson Advisors LLC, which the U.S. Securities and Exchange Commission approved April 5, will seek to generate income for U.S. clients by buying investments including high-grade corporate bonds, preferred securities, and master limited partnerships, according to Fridson, 61, who started his career as a company-debt trader in 1976.
Fridson formed New York-based research firm FridsonVision LLC in 2003 after leading Merrill Lynch & Co.’s high-yield strategy group, where he was the top-ranked analyst in the asset class for nine straight years in an Institutional Investor poll. Investors need help to boost fixed-income returns after years of Federal Reserve stimulus have pushed borrowing costs for the least-creditworthy companies to record lows, Fridson said in an interview.
“It’s particularly challenging for investors to obtain yield in the artificially low interest rate environment that the Fed is maintaining,” Fridson said. “The danger is to go into overly risky investments where you’re not well rewarded in pursuit of that yield, so good advice is particularly valuable at this point.”
The new firm, based in New York and Miami, focuses on maintaining low expenses and tax efficiency, according to a statement distributed today.
Lehmann, 71, writes a column on fixed income for Forbes Magazine. He started the Bond Investors Association newsletter and formed investment adviser Richard Lehmann & Associates Inc., based in Miami Lakes, Florida, in 1983. Livian, 42, founded asset management firm Livian & Co. in 2010, where he is chief executive officer, according to the New York-based firm’s website.
Yields on junk bonds, rated below BBB- at Standard & Poor’s and Baa3 at Moody’s Investors Service, fell to a record low of 5.98 percent last year after reaching as high as 22.7 percent in 2008 amid the worst recession since the Great Depression, according to data from the Bank of America Merrill Lynch U.S. High Yield Index.
Fridson was the global credit strategist at BNP Paribas SA’s investment manager from 2010 through August 2012. He joined after BNP absorbed Fridson Investment Advisors, a joint venture between the strategist and the bank.