Adam Abbas of Harris Associates - It’s All About Fixed Income

Orion's The Weighing Machine

Today, Rusty and Robyn are joined by Adam Abbas, Head of Fixed Income and Portfolio Manager at Harris Associates. Adam Abbas has been a manager of the Oakmark Bond Fund and Oakmark Equity and Income Fund since 2020. He is also a vice president of the Oakmark Funds. He started at Harris Associates in 2018 after working as a lead portfolio manager at KVK Credit Opportunity Fund LP. Prior to that, he was a portfolio manager at Driehaus Capital Management, a senior research analyst at Neuberger Berman/Lehman Brothers and an analyst at Huron Consulting Group. Mr. Abbas earned a B.S. degree from Northwestern University (2004) and an M.B.A. from the University of Chicago (2013).

Key Takeaways

• [03:07] - Adam’s professional background and how he came to specialize in Fixed Income.
• [06:36] - Learn more about Harris Associates and the philosophy that sets their firm apart.
• [08:58] - How does Adam apply Harris’s investment philosophy to their Fixed Income investing?
• [10:50] - What information does Adam gather from the equity side of the house and how much does this inform their approach?
• [12:45] - It has been a tumultuous couple of years for the Fixed Income market. What factors have helped them generate Alpha during this time?
• [16:28] - Adam runs a relatively concentrated portfolio for their space - how does he think about position sizing in the context of the risk return profile they hope to deliver?
• [18:59] - What are some of the key drivers for security selection within the fund?
• [20:27] - What are Adam’s thoughts on interest rates and the credit markets in general?
• [22:30] - What is Adam’s favorite investment idea for the remainder of 2024?
• [26:48] - Who are some of the colleagues and mentors that Adam is particularly thankful for?

Quotes

[15:08] - “We’re not out here trying to time markets at Harris, or putting huge conviction on our ability to call the exact time of the cycle. We believe that’s a really hard call to make…look at the track records for making those types of macro, top-down calls – they’re very tough to make.” ~ Adam Abbas

[19:52] - “...Business value, that’s where we are really differentiated. We spend some time on understanding ‘what is our forward looking view of total business value, and how does that inform the default risk that’s priced in the marketplace today?’ If that fair value is at a sufficient discount, or cheaper than the market price, and we can’t fully describe that disconnect from top down dislocations, that’s when we initiate the position.” ~ Adam Abbas

Links

• Adam Abbas on LinkedIn
• Harris Associates
• “Under Pressure” by Queen

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Disclosure(s) - Orion Portfolio Solutions, LLC, an Orion Company, is a registered investment advisor.

Compliance Code: 2018-OPS-8/8/2024