First Eagle's Deshpande: High Yield Opportunities Limited

John Coumarianos: One of the other interesting things about your funds, we've mentioned the gold, we've mentioned the cash stake, but you also are able unlike other funds to look throughout the capital structure of company. You're able to buy – distressed debt. Tell us about what's going on now in those areas? I know you were probably more active about a year ago, but what's happening now? How does the portfolio look in terms of its equity exposure, debt exposure, and cash exposure?

Abhay Deshpande: The equity exposure is, you know, it's roughly 70%, just roughly, depending on the fund. We have about the 10%, 12% position in gold and gold equities. And then we have the remainder in cash, fixed income, fixed income partly through Asian sovereign bonds and partly through some high yields. The high-yield portfolio is actually lower than it has normally been in times like these, partly because the higher prices have rebounded dramatically.

Coumarianos: The run-up has been tremendous, yeah. I think Steve Romick recently said high yield is now low yield.

Deshpande: Yes. Exactly. Right. The opportunity was there, and it has quickly evaporated. There is that's A. So we've sold some of our high yield – were high yield holdings. B, that doesn't mean that we've done any activity. We've just done it and it's kind of sparse in more unique areas.

So, for instance, we recently reorganized the debt of Canwest Partnership, which is a newspaper partnership in Canada, and we now have some ownership in that collection of newspaper assets.

We've reorganized a cardboard company in France. And so we've done these things selectively, but it's been kind of one-offs more than anything else. Just as you mentioned there is – the opportunity you said is very limited right now.

Coumarianos: Right.