Rivelle: Uncommon Opportunities in Bonds

Tad Rivelle: Yeah. Well we have certainly seen a massive amount of dislocation and disruption across the entirety of the fixed-income marketplace. The high-yield market has been given a good deal of attention in the last couple of months because it has run up so smartly. We have seen 20%-25% rates of return in that particular marketplace. It has been not only our contention, but I think the contention of many fixed-income managers for some number of months that equity like returns were priced into the bond market beginning in the fall of 2008 and continuing to the first couple of months of this year.

So looking forward, we think that the prospects for very high rates of return, rates of return that you would never associate with fixed-income investing, are likely to be realized by investors if they focus on the highest-quality, most secure type opportunities.

These would include, for instance, AAA rated particularly 30% Super Senior, enhanced AAA commercial mortgage-backed securities, some of the most secured situations that exist in the residential mortgage-backed securities market.

There are opportunities there in jumbo primes, in Alt-A, and even in sub-prime. And there is a continuing opportunity, in our view, in high-yield as well.