LM Capital Philosophy and Process

Philosophy & Process


The global financial landscape is increasingly complex, influenced by geopolitical events and economic trends. LM Capital Group leverages a disciplined, global approach to fixed-income management. By combining macroeconomic analysis and rigorous scenario planning, we identify opportunities and mitigate potential risks. Our proven track record demonstrates our commitment to delivering consistent long-term value for our clients.

I. Matrix Construction

To achieve a consensus on the perceived direction of interest rates, the Investment Strategy Group (ISG) uses a unique method to analyze current data: applying a matrix created by Co-Founder and Senior Managing Director Luis Maizel in his work at Harvard Business School. LM Capital’s matrix is composed of the following six crucial economic factors: Inflation, Employment, Trade Balance, Budget Deficits, International Influences, and Economic Indicators.

II. Security Selection

Individual security selections are based upon specific criteria developed by the ISG. LM Capital uses screening techniques to help identify the types of securities that fit within the investment policy structure.  Bonds are evaluated on the basis of duration, convexity, call features, quality, yield-to-maturity, and other factors to ensure that each security meets the client’s investment guidelines.

III. Trend Identification

By applying fundamental economic analysis, the ISG scores the matrix indicators on a numeric scale with a double weighting for Inflation and Economic Indicators. Examination of the matrix assists in determining the most attractive fixed-income markets and aids in identifying capital flows between countries.

IV. Situation Analysis

Once the initial portfolio allocation and construction process is complete, it is followed by a “what-if” scenario planning stage that examines what market reaction may occur in response to unexpected future events, either political, economic, or social. This allows LM Capital to be proactive in managing client portfolios in changing economic environments.

V. Portfolio Construction

The Trend Identification scores guide the portfolio positioning relative to the assigned benchmark with respect to average maturity, duration, and sector/country allocation decisions within the constraints imposed by the client’s investment policy.

Self Discipline

Although LM Capital spends a great deal of time exploring the impact of potential political, social, and economic events through its Global Scenario Planning process, it does not make radical changes in reaction to near-term movements. LM Capital focuses on long-term investment trends.

Our Products

Short Term

Intermediate

Strategic Core

Active Core Plus

Enhanced Core Plus

Emerging Market Debt

Long Duration