Varadero’s Opportunistic Credit Strategy invests in a variety of financial instruments including residential mortgage-backed securities, asset-backed securities, commercial real estate mortgage-backed securities, collateralized debt obligations, whole loans, and other pools of credit. Varadero rebalances its exposure to different sectors and instruments depending on expected risk-adjusted returns. Tail hedges and short positions are used to minimize the impact of exogenous risks on the portfolio. Prudent leverage may be used selectively in an effort to enhance returns.
Varadero’s Specialty Finance Strategy seeks differentiated value through proprietary sourcing, diversification across asset types, and prudent deal structuring. We seek to capitalize on opportunities to support credit extension as a result of economic, technological, and regulatory changes affecting traditional lenders. Specialty Finance assets include small business loans, auto loans, residential transition loans, consumer loans, and equipment finance leasing. Prudent leverage may be used selectively in an effort to enhance returns.
Varadero’s Structured Solutions Strategy offers bespoke portfolio construction to satisfy investor needs not adequately met by more standardized investment offerings. We work with investors to identify their requirements across a broad range of metrics including credit rating, duration, sector exposure, and cash flow profile. Varadero then seeks to structure a custom solution to meet investors’ core requirements. Investments may include mortgage-backed securities, asset-backed securities, commercial real estate mortgage-backed securities, collateralized debt obligations, and specialty finance assets.