About Us

Kapstream Capital (ABN 19 122 076 117, AFSL 308870) was founded in 2006 by Kumar Palghat and Nick Maroutsos, both seasoned fixed income portfolio managers.

Kapstream was founded on a simple belief; that by removing the constraints inherent in conventional benchmark-relative fixed income portfolio strategies, and by setting absolute return targets and absolute risk limits, portfolios could be constructed using predominantly investment grade assets that more closely met the true requirements of investors in preserving capital and delivering consistent and positive absolute returns.

Until then, more conventional fixed income managers typically built portfolios around issuance-based bond benchmarks – skewed to the largest borrowers, often not those offering the best return potential – who were more focused on preventing benchmark tracking error than delivering the best return potential. Kapstream concluded that they could consistently achieve positive results by going beyond the traditional core manager approach.

They decided to use a wide range of instruments including derivatives to exploit market inefficiencies across the full spectrum of fixed income investments, combined with the flexibility to move meaningfully into cash and government bonds at times of market uncertainty and stress.

Fixed Income Manager Universe

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Kapstream today

Today Kapstream manages A$16 billion from offices in Sydney and Newport Beach, California, mostly under the firms flagship global absolute return strategy.  Since July 2015 Kapstream has operated as an autonomous ’boutique’ subsidiary, initially of Janus Capital Group and – since their merger in May 2017 with Henderson Global Investors – now of Janus Henderson Investors. Kapstream has always believed in an outsourced business model, appointing external service providers to undertake all non-investment activities, so that we may stay entirely focused on what we do best; investing and managing fixed income portfolios. All back office, administrative and retail distribution services continue to be provided by long-term business partner Fidante Partners Limited, part of the Challenger Limited group of companies. Kapstream has been a keen and long-term supporter of a number of domestic and international charities. Our charitable program currently supports the following causes:

Funds under management as at June 2021 (AUD)
total fum $15.9bn
  • 4.1bn Kapstream Absolute Return Income Fund
  • 0.3bn Kapstream Absolute Return Income Plus Fund
  • 5.5bn Segregated Absolute Return Income Portfolios
  • 0.8bn Segregated Sovereign Bond Portfolios
  • 5.0bn Janus Henderson US Absolute Return Income Funds
  • 0.2bn Janus Henderson US Absolute Return Income Plus Funds
Latest Commentary
Generic credit spreads are tight and generally credit markets (like most others) are priced to perfection. That is not to say that there are no pockets of value left, but like watering holes on the African savanna during a hot summer, it is getting harder and harder to find them as relative value continues to evaporate. Given our view that credit fundamentals are robust (and improving), technicals are strong, but valuations are stretched and relative value is becoming more challenging to find, this is a time to sweat assets harder. So given the above backdrop, what strategies have we employed to ensure ongoing appeal and added value to our portfolios?
Shred it for credit (162.07 KB )
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The global absolute return fixed income specialist.