Inside a Long/Short Credit Hedge Fund | Frits Lieuw-Kie-Song (Ironshield Capital) #18

A fifteen-billion-dollar credit manager's European analyst can look at three or four situations before the rest fail his liquidity screen. Frits Lieuw-Kie-Song runs a few hundred million and can look at hundreds of them. This episode is a full walk through how a long/short credit hedge fund is actually run: which credits are eligible in the first place, how positions are sized from the downside before conviction is discussed, when a short is worth the borrow and the carry, and where the tail hedge sits. 📖 For the full written analysis and charts, read the Substack here: [INSERT SUBSTACK LINK] Frits Lieuw-Kie-Song runs the HY Alpha / Market-Neutral strategy at Ironshield Capital, a European leveraged finance boutique in London founded by David Nazar around twenty years ago. He spent over two decades running absolute return high yield portfolios, including eleven years at Allianz Global Investors, before joining Ironshield in 2025. Ironshield's flagship is a special situations fund with restructuring experience across most European jurisdictions; the strategy Frits runs sits deliberately upstream of that, in performing credit with a spread sweet spot of 300 to 500 basis points. 📊 KEY INSIGHTS FOR CREDIT INVESTORS: - Liability management exercises now bring the median company back within roughly a year, because the fee-driven process fixes the balance sheet without fixing the business. - Being in the co-op group is not the same as sitting on the committee, and Frits will pass on a situation where he cannot influence how the pie is divided. - A 400 million single-bond capital structure is too small to matter for a fifteen-billion manager, which is where in-depth research still earns its keep. - Position size is dictated by the downside case, with a loss budget of roughly 50 basis points of the fund per position. - The tail hedge is put spreads 5 to 15% out of the money, six months out, rolled regularly, written for the event where correlation goes to one. ⏱️ TIMES

Added 4 Aug 2026