• Cutwater Asset Management, was originally established in 1991 as a fixed income asset management specialist dedicated to providing quality fixed income performance.
• A wide range of products managed with a proven top quartile track record over a nearly 20 year period.
• $42 billion of fixed income assets under management places us as one of the top 50 fixed income specialists in the world.
• We have depth of resources with 126 employees and 80 professionals dedicated to portfolio management and credit analysis.
• Cutwater Asset Management remains a well capitalized and profitable asset manager, steadily growing assets under management as a specialist in fixed income solutions for our varied and global client base.

• Cutwater Asset Management's mission is to fulfill the fixed income market's critical need for innovation, customer service and consistent performance over the long term.
• Cutwater is led by proven professionals, who offer an informed perspective, unparalleled top level client engagement, innovative solutions and superior service.
• Cutwater combines a deeply held ethos of responsibility with agility and vision to perform in the marketplace, partner with a wide range of clients, and deliver consistently superior investment results.

A "Cutwater" is the stainless steel strap of metal at the bow of a boat; despite waves that slap at the hull, the Cutwater slices through the swirling currents and helps keep the bow pointed toward the ultimate destination. We chose the name to convey some of the guiding principles that define our investment philosophy -- successfully navigating our clients through turbulent waters while focusing on the long-term horizon and maximizing investment performance.

We believe that optimal asset allocation decisions take into consideration a long-term view of a portfolio's potential performance. While we remain nimble and follow short-term drivers, we have found that considering a valuation and risk framework that looks at a full economic cycle provides more advantageous entry and exit points and drives higher returns than short-term focused strategies. We consequently view investment horizons and optimal asset allocation from a longer-term perspective than most.

Cutwater also believes that successful allocation of capital is driven by a balance between experience, quantitative analysis and fundamental research combined with a healthy appreciation for the psychology of markets. While quantitative tools harness opportunity, fundamental analysis harnesses experience and execution. In a balanced approach where neither dominates, we develop our capital allocation framework. We look through a cycle to find the most beneficial opportunity; taking on more risk during "fear markets" when the margin of safety is greater and shedding risk during greed cycles rather than fighting through the vagaries of quarterly performance goals. For nearly 20 years, we have found that this strategy produces the best return on capital for fixed income portfolios. Also core to our philosophy is that yield provides the dominant source of return in fixed income. Therefore we use credit as a key driver of performance. Central to our credit philosophy is a view on the performance of the credit during its full maturity, as the maturity of many bonds is likely to extend beyond any one credit cycle. It is common for asset managers to approach bond analysis from one of two perspectives, focusing only on either the near-term relative trading value, or alternatively, on eventual "money goodness". Formulating an investment decision on one or the other may make sense when the investment horizon appears to be clearly defined. Conversely, we have always been mindful of the potential for investment horizons to change quickly due to unforeseen reasons (shortened or lengthened by unanticipated events). Apart from trading value and timeliness of cash flows we are also aware that rating stability, in and of itself, is a critical performance metric for many investors. As such, we ensure that our analysis is deep enough to formulate a view on all three key performance characteristics: near-term relative value, return of principal at maturity, and importantly, the credit stability during the time between. This dictates a deep approach to security analysis, requiring the skills of both the portfolio manager/trader and credit analyst, both of whom are accountable for each credit approved.

When it comes to credit allocation, there is no substitute for detailed fundamental analysis. The basis for our credit decisions starts with a lender's perspective. It is supported by detailed modeling and an experienced team. This long-term horizon and structured credit discipline creates for us a competitive advantage vis-a-vis short-term orientations which can lead to undue volatility. Our considered approach through full cycles highlights return opportunities and often will produce countercyclical strategies. We incorporate both top-down economic and market forecasting with elements of bottom-up sector and security selection in portfolio management.

steady progression of growth and innovation

technology

Cutwater has developed proprietary quantitative models to analyze various sectors of the market which include both index eligible and non-index eligible assets. These models build off Cutwater's leading-edge quantitative capabilities and incorporate its understanding of risk, not only at the security level, but also at the portfolio level, where we look at the "capital at risk" in the overall portfolio. Additionally, Cutwater has developed proprietary, cutting edge models for its Liability Driven Investing strategies and its structured funding platform services. These models allow portfolio managers and others to run simulations varying interest rates, currency rates and credit spreads to determine what the proper asset allocation and risk profile should be. Importantly, these models provide supplements, but do not supplant the judgment of our experienced team.