Symphony Asset Management LLC (“Symphony”) has provided investment advisory services since 1994 to a wide variety of institutional and individual clients. Institutional clients include private investment funds, structured debt vehicles (primarily collateralized loan obligations), pension funds, registered investment companies, and separately managed accounts. Symphony is general partner to private investment funds and a collateral manager to the structured debt vehicles. Symphony, an investment advisor registered with the U.S. Securities and Exchange Commission, is an indirect wholly-owned subsidiary of Nuveen, LLC (“Nuveen”), which is a subsidiary of Teachers Insurance and Annuity Association of America (“TIAA”). See Item 10 entitled Other Financial Industry Activities and Affiliations.

Formalization and Scope of Advisory Services

Symphony formalizes its advisory relationship with a client through certain protocols such as the execution of an investment management agreement with the client (e.g., for retail SMA dual contract and institutional separately managed accounts) or the acceptance of new account documentation with respect to such client (e.g., for a discretionary wrap fee program client). Symphony typically does not provide advice outside of the confines of a formal advisory arrangement. Communications made in the marketing and sales process (including RFPs/RFIs, portfolio reviews, general written materials on products, strategies, and services, educational materials, etc.) are not intended and should not be relied upon as advice or a recommendation. Prior to the formalization of an advisory relationship, prospective clients and existing clients (with respect to new or different services) should make any decisions regarding any specific course of action based on their own needs and circumstances and in consultation with their own independent advisors.

Symphony regularly communicates with financial advisors, consultants and other intermediaries (“advisors”) on relevant investment matters, including Symphony’s products and services. To the extent that these advisors provide advice to a Symphony client that is an ERISA plan, participant, beneficiary or IRA and meet the definition of an ERISA fiduciary, it is expected that the advisor will function as a fiduciary to the Symphony client, capable of independently evaluating the merits and risks of Symphony’s products and services and responsible for exercising independent judgment in evaluating Symphony’s products and services, and Symphony clients should look to their own advisors for advice regarding any specific course of action.

Symphony’s services are limited to the scope of a formalized arrangement with respect to specific services (e.g., discretionary investment management to a particular strategy). Symphony does not provide any fiduciary services outside of such formalized arrangement. Any Symphony communication outside the scope of a formalized arrangement to any prospect, client, financial advisor or other intermediary should not be relied upon as advice or a recommendation.

Different products, services and strategies provided by Symphony (and offered or made available by advisors) have different features, terms and conditions, risks, and direct and indirect compensation and profitability, among other things. Therefore, Symphony (and an advisor) will have differing incentives and interests in marketing, offering, providing or making available different products, services or strategies. Prospects and clients, with the advice of their independent advisors, should carefully determine and select the products, services and strategies that best meet their needs. In the absence of a formalized advisory arrangement, investors in funds and pooled investment vehicles advised or sub-advised by Symphony will not be advisory clients of Symphony, and Symphony will not provide investment advice or recommendations with respect to the merits and suitability of the particular investment and investment decision for the particular investor. Investors in funds and pooled investment vehicles are encouraged to consult their own financial, tax and legal advisors regarding such decisions.
Types of Advisory Services
General Symphony is a diversified investment manager that manages both traditional, long-only portfolios, as well as alternative investment mandates. Symphony provides investment advisory services, including custom investment solutions and hedged strategies, to global institutional and high net worth investors through separate accounts and commingled funds. The firm offers its investment advisory services through a number of investment strategies which involve investing in senior bank loans, high yield debt securities, convertible bonds, and public equities across a platform of long-only strategies, hedge funds, structured products, and sub-advised registered investment funds.


Symphony, independently or together with its parent Nuveen, also creates and manages seed or incubator accounts (referred to as “Proprietary Accounts”) in order to develop a performance track record in new investment products and/or strategies before offering them to outside investors. Such accounts may be seeded by Symphony, its affiliates and/or its senior investment and management personnel who simultaneously manage multiple types of investment vehicles, including sub-advised mutual funds, utilizing the same or similar investment strategies. Generally, management and/or performance-based fees are waived for Proprietary Accounts.

Symphony provides investment advisory services to institutional clients including pension funds, private investment funds, structured debt vehicles (primarily collateralized loan obligations) and registered investment companies, some of whom may be Symphony’s affiliates. Symphony generally offers its investment advisory services for fees based on a percentage of assets under management, and for certain accounts earns a performance fee. Symphony’s fees are described in Item 5 entitled Fees and Compensation.

Symphony’s Co-Heads of Investments and portfolio managers are responsible for the investment decisions with respect to investment strategies, including identification and selection of specific securities and investments to be purchased in light of current and anticipated economic and market conditions, and taking into account guidelines, limitations, legal restrictions, and information relating to the client. Symphony provides its services to both single strategy accounts and multi-strategy accounts.

Symphony manages multiple accounts with different investment objectives, guidelines and policies, and with different fee structures. For example, certain accounts are long-only while other accounts are long-short. Further, certain accounts pay performance fees. The management of these accounts may give rise to potential conflicts of interest because Symphony could have an incentive to favor one account over another. See Item 6 entitled Performance-Based Fees and Side-by-Side Management.

Institutional Separately Managed Accounts

Symphony provides advisory services to institutions through separate accounts (“Institutional Separately Managed Accounts”). The fees and services for each such arrangement are individually negotiated, depending on factors such as asset class, portfolio complexity, client type, and account size or other special circumstances. A client’s investment management agreement (the “IMA”) may generally be terminated by the client and Symphony upon thirty (30) days’ written notice. However, different termination provisions may be negotiated. Private Investment Funds Symphony provides investment advice for a number of private funds which are generally organized as domestic limited partnerships or as Cayman Islands limited partnerships or exempted companies (collectively, “Private Funds”). Symphony is also general partner to certain of the Private Funds. Private Funds may be organized as a fund of one, as stand-alone commingled funds or as part of master-feeder structures. The Private Fund offering documents describe the terms and conditions of the fund, including fees and risk factors, and should be read carefully prior to investment. No offer to sell Private Funds is made by the descriptions in this Brochure, and Private Funds are available only to investors that are properly qualified. Collateralized Loan Obligations

Symphony provides investment advisory services, as collateral manager, for a number of structured debt vehicles, primarily collateralized loan obligations (“CLOs”) which are generally organized in the Cayman Islands as exempted companies or in the United States as limited liability companies. The investment management relationship between Symphony and each CLO is governed by an IMA and the constituent documents of each CLO.

The CLO offering documents describe the terms and conditions of the fund, including fees and risk factors, and should be read carefully prior to investment. No offer to sell CLOs is made by the descriptions in this Brochure, and CLOs are available only to investors that are properly qualified.

Registered Investment Companies

Symphony provides investment advisory services to certain registered investment companies (“Mutual Funds”), some or all of which may be sponsored by Symphony’s affiliates. In connection with its advisory services to an investment company, Symphony or its related persons providing services to such investment company receive advisory, administration, co-administration and/or distribution fees from the investment company and/or from other investment advisers to the investment company.

No offer for or solicitation to buy any Mutual Fund is made by any description of Mutual Funds in this Brochure. Clients should carefully review the Mutual Funds’ prospectuses or other offering documents for more detailed information regarding a Mutual Fund advised or sub-advised by Symphony.

SMA Programs

Symphony provides investment advisory services to individual clients in separately managed accounts through programs (wrap fee and dual contract, collectively “SMA Programs”) sponsored by broker-dealers and other Symphony financial intermediaries. In traditional wrap fee programs, Symphony provides its advisory services pursuant to an advisory agreement with the wrap fee program sponsor. Wrap fee programs typically include comprehensive custody, financial advisory and certain trading (provided by the SMA Program sponsor) and investment advisory services (provided by the manager) for a bundled fee payable to the sponsor.

In a dual contract program, Symphony provides its advisory services pursuant to an advisory agreement directly with the client. A client may separately arrange with one or more third parties for custody, financial advisory and certain trading services to be provided on a partially-bundled or unbundled basis. In a partially-bundled program, certain of such services (typically custody, financial advisory, and certain trading) are provided for a bundled fee arrangement. In an unbundled arrangement, such services are contracted, provided and paid for separately. The services provided by Symphony to SMA Programs differ in some respects from the services provided to its Institutional Separately Managed Accounts and other clients who do not participate in SMA Programs. Although the investment strategies Symphony uses in managing SMA Programs are similar to those offered to its other clients, they may involve fewer securities holdings due to smaller account sizes. Also, strategies, restrictions and guidelines may vary among SMA Programs. SMA Program clients should review all materials relating to their program (including the program brochure) regarding the program’s terms, conditions and fees, and consider the advantages, disadvantages, the risk profile and overall appropriateness of the program in light of the client’s particular circumstances. An SMA Program client may generally terminate Symphony’s investment advisory authority at any time upon written notice, depending on the terms of the particular program. Fees paid in advance are generally refunded on a pro-rata basis if the service is terminated within the payment period.

See Additional Notice to SMA Program clients in Item 19 entitled Additional Information.

Model-Based Programs

Symphony has and may in the future participate in model-based managed account programs (“Model-Based Programs”) in which Symphony provides a program sponsor or an overlay manager non-discretionary investment advice through model portfolios and, in certain cases, handles certain trading and other functions. The Model-Based Program sponsor or overlay manager is generally responsible for investment decisions and performing many other services and functions typically handled by Symphony in a traditional discretionary managed account program. Unless Symphony has discretion, Symphony does not consider itself to have an advisory relationship with clients of the sponsor or overlay manager of a Model-Based Program. To the extent that this Form ADV Part 2A is delivered to SMA Program or Model-Based Program clients with whom Symphony has no advisory relationship or under circumstances where it is not legally required to be delivered, it is provided for informational purposes only. Furthermore, because a Model-Based Program sponsor or overlay manager generally exercises investment discretion and, in many cases, brokerage discretion (described further in Item 12 entitled Brokerage Practices), performance and other information relating to Symphony’s services for which it exercises investment and/or brokerage discretion is generally provided for informational purposes only and may not be representative of Model-Based Program client results or experience. Symphony is not responsible for overseeing the provision of services by a Model-Based Program sponsor and cannot assure the quality of its services.
Investment Restrictions
Separate Accounts

Symphony’s discretionary authority over an account may be subject to directions, guidelines and limitations imposed by the client or, in the case of an SMA Program, the SMA Program sponsor. Symphony will endeavor to follow reasonable directions, investment guidelines and limitations. Although Symphony seeks to provide individualized investment advice to its SMA Program discretionary client accounts, Symphony may not be able to accommodate investment restrictions that are unduly burdensome or materially incompatible with Symphony’s investment approach, and may decline to accept or may terminate client accounts with such restrictions. In addition, Symphony may decline to permit any account restriction that affects more than a stated percentage of the account. For Institutional Separately Managed Accounts, investment restrictions are generally set forth in the IMA. Pooled Investment Vehicles Symphony seeks to exercise discretionary authority with respect to Mutual Funds, Private Funds or other pooled vehicles’ assets, including structured vehicles, in a manner that is consistent with the fund’s investment objectives, strategies and limitations as disclosed in such investment vehicle’s registration statement, offering memoranda, or other applicable disclosure documents. Symphony’s discretion may also be subject to the oversight of a fund’s governing body (e.g., board of directors) and may be subject to the oversight of another investment adviser.
Assets Under Management
As of December 31, 2018, Symphony’s total regulatory assets under management (“AUM”), discretionary were approximately $18.8 billion. please register to get more info

Advisory Fees

Symphony’s fees for investment management services are typically based on a fixed or tiered percentage of assets under its management. Certain eligible clients may also pay performance fees or special profit allocations in addition to asset based fees.

Symphony’s fee arrangements are based on various factors, which include type of investment strategy, asset class, services provided, type of client and/or account, size of account and for private funds, the time of investment among other factors. Fees and services may be negotiated based on these and other factors. Some clients pay higher or lower fees than other clients and some existing clients pay higher or lower fees than new clients. Related accounts may be aggregated for fee calculation purposes in certain circumstances. See below for a more detailed description of Symphony’s fees.

When Symphony calculates fees, valuations of account assets are determined in accordance with its valuation procedures, which generally rely on third party pricing services, but may permit the use of other valuation methodologies in certain circumstances. Because the use of certain valuation methodologies presents a potential conflict for Symphony, in that its fees are generally based on the value of assets in a client’s account, Symphony has adopted policies and procedures to seek to ensure that its valuations are fair. Symphony’s determinations may differ from valuations reflected in a client’s custodial statements. Fees are generally payable monthly or quarterly (either in advance or in arrears as negotiated, or in the case of SMA Programs as determined by the sponsor) based upon monthly or calendar quarter-end market value, as the case may be.

Performance-based fees may create an incentive for Symphony to make investments that are riskier or more speculative than would be the case in the absence of a performance-based fee. In these instances, Symphony’s compensation may be larger than it would otherwise have been because the fee will be based on account performance instead of, or in addition to, a percentage of assets under management. See Item 6 entitled Performance-Based Fees and Side-by-Side Management for a discussion of potential conflicts as a result of charging fees based on assets under management.

Holdings in a client’s separate account may include investment companies or other pooled investment vehicles, such as private investment funds, for which a separate management fee is charged. In the event that client assets are invested in an investment company or other fund for which Symphony or an affiliate serves as adviser, those assets are generally excluded from the applicable advisory account fees. Symphony typically waives management fees and performance fees on assets Symphony manages for its employees and Proprietary Accounts.
Fee Schedules
The following sets forth Symphony’s basic advisory fee arrangements, although these fees and other compensation may be negotiated and arrangements with different clients may vary. Fees for all types of accounts are payable quarterly, either in advance or arrears. Institutional Separately Managed Accounts Symphony generally receives from Institutional Separately Managed Account clients a fixed or tiered fee equal to a percentage of the client’s total assets under Symphony’s management. The fees paid by Institutional Separately Managed Accounts are determined through negotiation and are set forth in Symphony’s IMA with the client. The fees generally range from 1% to 2% per annum on accounts for which Symphony uses short-selling, leverage, hedging, derivatives and similar investment methods in the investment strategy (“Hedged Strategies”). For long only Institutional Separately Managed Accounts which do not use Hedged Strategies, depending on the investment strategy, assets under management, type of account, services provided and other factors, the fees generally range from 0.37% to 1% per annum.

Symphony may charge Institutional Separately Managed Accounts a performance fee, in compliance with Rule 205-3 promulgated under the Investment Advisers Act of 1940 (the “Advisers Act”), as amended, and all applicable laws relating to such a performance fee.

Private Funds

Hedged Private Funds

For both on shore and off-shore Private Funds which primarily invest in fixed income instruments in Hedged Strategies, (“Credit Hedge Funds”) depending on the investment strategy, Symphony receives an annual management fee which generally ranges from 1.5% to 2% of the net asset value of each investor’s capital account funds. In addition Symphony receives from Credit Hedge Funds an annual performance-based special profit allocation or an annual performance fee in the range of 10% to 20%. The annual performance fee or special profit allocation is based on net profits after management fee and any applicable performance hurdle.

In the Private Funds which primarily invest in equities in Hedged Strategies, generally, Symphony receives an annual management fee of 1% of the net asset value of each investor’s capital account together with an annual performance based special profit allocation fee of 20% of net profits after management fee and any applicable performance hurdle.

Long-Only Private Funds

For private funds that are long only and do not utilize Hedged Strategies, Symphony receives an annual management fee, which is generally tiered based on the amount invested and ranges from 0.45% to 0.55% of an investor’s capital account.

The fees and expenses for each Private Fund, whether Hedged or Long-Only, are described in more detail in each Private Fund’s offering documents. If lower fees are negotiated with a specific investor or shareholder in a Private Fund, such fee would be set forth in an agreement between the Private Fund and such investor or shareholder.

Collateralized Loan Obligations

For providing investment services as Collateral Manager or Sub-Advisor of CLOs, Symphony’s fees range from 0.30% to 0.50% per annum based on assets under management. For providing services to certain CLOs, Symphony receives a performance fee. The fees and valuation methods used to determine the fee are described in more detail in the offering documents for the CLOs, the Collateral Management Agreement or IMA entered into between Symphony and the CLO Issuer or the Advisor when Symphony acts as Sub-Advisor as the case may be. Mutual Funds Fees payable to Symphony by Mutual Funds that Symphony sub-advises are disclosed in the relevant prospectus or offering documents. Sub-advisory fees are either fixed at less than 1% on an annualized basis or tiered based upon the level of assets under management for one or more Mutual Funds. Fees are calculated on each business day based on average net assets and payable monthly in arrears. SMA Programs and Model-Based Programs The portfolio management fee paid to Symphony for its portfolio management services to SMA Programs and Model-Based Programs is determined by an agreement between Symphony and each program sponsor. In the case of wrap fee programs, Symphony’s fee generally ranges up to 0.40% annually. Total annual fees charged by wrap program sponsors are generally in the range of up to 3% of the client’s assets in the program. The unbundled advisory fee paid to Symphony for its portfolio management services is set forth in an agreement between Symphony and each unbundled program client. Symphony’s standard fee for unbundled program clients generally ranges up to 1% annually. Model portfolio services are furnished for a negotiated fee paid by the purchaser.

Symphony’s wrap fees are generally paid monthly or quarterly, in advance or in arrears, as provided in the agreement with the client, based on the market value of the account(s) as specified in the investment management agreement or other governing document. Market values include accrued dividends and other income.

In the case of wrap fee SMA Programs and certain dual contract SMA Programs, payment methods generally will be determined by the SMA Program sponsor. SMA Program sponsors typically collect the total wrap fee and remit Symphony’s fee to Symphony. Certain dual contract program sponsors may collect and remit Symphony’s fee to Symphony.

Generally, if an account is opened or closed during a billing period, the advisory fees are pro- rated for that portion of the billing period during which the account was open. In certain cases, fees may be deducted from client accounts as agreed upon with the client. Clients should contact the SMA Program sponsor or their custodian for more information relating to the deduction of fees from client accounts.

See also Item 15 entitled Custody.
Other Fees and Expenses
Clients generally will separately incur brokerage and other transaction costs. See Item 12 entitled Brokerage Practices and Item 19 entitled Additional Information.

On behalf of certain of its clients, Symphony may invest in closed-end funds, open-end funds, exchange-traded funds (ETFs), exchange traded notes (ETNs), and other pooled investment vehicles. When Symphony invests client assets in funds, unless otherwise agreed and where permitted by law, the client will bear its proportionate share of fees and expenses as an investor in the fund in addition to Symphony’s investment advisory fees.

In addition, Symphony may invest client assets or recommend that clients invest in shares or other interests in certain funds advised or administered by Symphony or its affiliates. To the extent that Symphony invests client assets in an affiliated fund, Symphony generally excludes such assets from the applicable advisory account fees so as to avoid double charging of fees. Symphony’s clients generally will incur brokerage and other transaction costs either separately or through a bundled fee in the SMA Programs. In SMA Programs that permit Symphony to trade away from the wrap sponsor or its broker-dealer affiliate if Symphony believes such sponsor or its affiliate cannot provide best price or execution under the circumstances, if permitted by the agreement with the SMA client or SMA Program sponsor, Symphony sometimes trades away from such parties. In such cases, clients generally incur transaction and other costs and fees in addition to the wrap fee. Program clients should review all materials available from a third party sponsor concerning the program, sponsor and the program’s terms, conditions and fees. See Item 12 entitled Brokerage Practices. Private accounts also incur expenses related to the Administrators, auditors, and outside counsel. These expenses are set forth in the offering documents and may be reimbursed or waived at Symphony’s discretion. From time to time, a client may instruct Symphony to suspend investment management services for their accounts for a period of time. Symphony may charge standard fees for all or a portion of such time to reflect the administrative costs associated with implementing such instructions.

To the extent a client’s IMA provides that Symphony’s fees are to be paid in advance, the unearned portion of such fees will be refunded to the client upon termination of the service. For SMA Program sponsors whose agreements provide that Symphony’s fees are to be paid in advance, Symphony will refund any prepaid, but unearned fees to the program sponsor. The SMA Program sponsor is then responsible for refunding fees, as applicable, to the client upon termination of the service. The refunded amount will be determined on a pro-rata basis if the service is terminated within the payment period.

Symphony supervised persons and related sales personnel typically market Symphony’s investment capabilities to various prospects and intermediaries. Symphony’s investment capabilities are available directly through provision of investment advisory services, or indirectly by investment in funds or pooled investment vehicles advised or sub advised by Symphony. Certain Symphony supervised persons and related sales personnel will be internally compensated for successful marketing or selling activities with respect to Symphony’s investment advisory services. Prospective clients are encouraged to consult their own financial, tax and legal advisors regarding any investment decision regarding Symphony’s investment advisory services.

Certain Symphony supervised persons and related sales personnel are also associated with Symphony’s affiliated broker-dealer, Nuveen Securities, LLC (“Nuveen Securities”), and in that capacity engage in marketing or selling activities with respect to shares or interests in funds and pooled investment vehicles advised or sub advised by Symphony. Such funds include funds in the “Nuveen” funds family. See Item 10 entitled Other Financial Industry Activities and Affiliations. Certain Symphony supervised persons and related sales personnel will be internally compensated for successful marketing or selling activities with respect to shares or interests in funds and pooled investment vehicles advised or sub advised by Symphony. please register to get more info

Symphony offers investment advisory services to multiple accounts with different investment objectives, guidelines and policies, and with different fee structures. See Item 5 entitled Fees and Compensation. Symphony receives both asset-based fees and performance-based fees from certain clients as compensation for its advisory services. Performance-based fees may create an incentive for Symphony to make investments that are riskier or more speculative than would be the case in the absence of a performance-based fee. In these instances, Symphony’s compensation may be greater than it would otherwise have been, as the fee will be based on account performance instead of, or in addition to, a percentage of assets under management. In addition, employees of Symphony may invest in an affiliated Mutual Fund or Private Fund of Symphony or its affiliates (a “Related Fund”). Such investments may represent all or a significant percentage of the Related Fund’s or the employees assets. Symphony’s compliance department reviews Related Funds and accounts with performance-based fees to detect evidence or patterns of preferential treatment relative to comparable accounts without performance-based fees or unrelated accounts, respectively. please register to get more info

Symphony provides investment advisory services to a wide variety of individual and institutional clients, including pension funds, foundations, endowments, sovereign wealth funds, private investment funds, structured debt vehicles (primarily CLOs), registered investment companies, and other pooled investment vehicles. Investors in Symphony managed strategies may include public and corporate pension funds, Taft-Hartley Plans, sovereign wealth funds, high net worth individuals, individuals through SMA Programs, corporate non-pension accounts, endowments and foundations. Prior to investing in any funds or other pooled investment vehicles, an investor should review the relevant offering materials for important information concerning the objectives, policies, strategies, risks, fees, and other important information. Symphony reserves the right to refuse to accept any account for any reason.

Institutional Separately Managed Accounts

Symphony generally requires a minimum account size for separate account assets under management in a range of $50,000,000 to $100,000,000 depending on the investment strategy. This minimum may be negotiated. In determining the acceptable minimum account value, Symphony considers arrangements with other financial service providers to the accounts and certain services provided by the custodian.

SMA Programs

For SMA Programs, Symphony generally requires a minimum account size of $100,000, although the specific minimum accounts size may vary by program. Symphony may make exceptions to the minimum stated account size based on client type, asset class, pre-existing relationship with the client or a program representative and other factors.

Mutual Funds, Private Funds and Collateralized Loan Obligations

The prospectus, confidential private offering circular or private offering memorandum for each Mutual Fund, Private Fund and CLOs and other structured debt vehicles advised by Symphony includes information regarding the minimum investment requirements for each such fund. Proprietary Accounts Symphony, independently or together with its parent Nuveen, also creates Proprietary Accounts in order to develop a performance track record in new investment products and/or strategies before offering them to outside investors. Such accounts may be seeded by Symphony, its affiliates and/or its senior investment and management personnel who simultaneously manage multiple types of investment vehicles, including sub-advised mutual funds, utilizing the same or similar investment strategies. Generally, management and/or performance-based fees are waived for Proprietary Accounts. Generally, there is no minimum account size for Proprietary Accounts. please register to get more info

Symphony uses fundamental and quantitative analysis methods in the provision of its advisory services. Symphony generally employs bottom-up security selection and performs analysis across the capital structure of investment candidates. Symphony utilizes various data sources and, for certain strategies, proprietary computerized models in the provision of its advisory services.

Symphony may consult with securities analysts, selected broker-dealers, market-makers, economists, and others in formulating investment strategies. Symphony may also attend company presentations and participate in interviews and inspections of certain companies. In addition to this research, Symphony may engage in discussions with management and others having business with the corporation. Symphony also regularly monitors newspapers, magazines, and trade journals; websites; information and research provided by affiliated and unaffiliated analysts and consultants; corporate rating services; annual reports, prospectuses, and other SEC filings; and information published by the company, such as press releases.

At times Symphony or its personnel may come into possession of material, nonpublic information (“MNPI”) about a company. Symphony obtains MNPI to evaluate and invest in senior bank loans and also may obtain MNPI to evaluate and invest in privately placed debt securities. Symphony has in place procedural and systematic controls designed to ensure that portfolio managers do not place trades for client accounts using MNPI in violation of securities laws. Controls include limiting access to private information on companies, maintaining a list of restricted companies, and blocking trades in these companies. When making decisions as to whether or not to obtain MNPI for a company and thereby restrict trading of it, Symphony portfolio managers consider the potential adverse impact to client accounts caused by restricting trades of the company in client accounts. To the extent that possession of MNPI precludes portfolio managers from trading in certain companies, a client account may not be invested in securities that would otherwise be beneficial to such account.

General descriptions of Symphony’s investment strategies are included below. Symphony reserves the right to limit the availability of any particular strategy at any given time based on factors including asset class capacity, pre-existing relationships, minimum account sizes, fees and distribution channels. In addition, Symphony may develop other investment strategies from time to time and manage portfolios according to a client’s specific investment guidelines or as a result of market opportunities, thus, strategies may vary by client account.

Certain strategies may be available only in certain channels or through a purchase of shares of registered investment companies, Private Funds, CLOs, or other pooled investment vehicles. The descriptions of the investment strategies below are qualified in their entirety by the information provided by Symphony to its advisory clients, included in a fund prospectus or official offering documentation, or included in or provided with any program disclosure statement. Prior to investing in any investment company, Private Fund, CLO, or other pooled investment vehicle, prospective investors are asked to review the relevant prospectus or offering memorandum for important information.

Symphony provides advisory services regarding floating rate investments, primarily senior secured debt (“senior bank loans” or “senior loans”); fixed income investments, specifically high yield bonds, CLOs, and convertible bonds; as well as equity investments. Symphony will generally make such investments through various strategies including, for fixed income and loan investments, long only, long-short, convertible arbitrage and credit opportunities strategies and, for equity investments, long-only, long-short and market neutral equity strategies. In addition, for certain clients who invest in non-U.S. denominated shares in accounts managed or sub-managed by Symphony, Symphony or the Administrator may enter into F/X transactions to hedge currency risk. For Credit strategies, described below, the loans and high yield bonds Symphony invests in are generally rated below investment grade. Short selling and derivative instruments may also be used in the portfolios of eligible clients, including but not limited to options on futures, forward rate agreements, interest swaps, credit default swaps, single security swaps, currency derivatives, swap options, index options, interest rate caps, floors, collars and options on municipal futures contracts and other instruments. Short selling and investments in these types of investments are not suitable for all investors as they are speculative and carry a high degree of risk. Where permitted by law and the account agreement or pooled investment vehicle’s prospectus or other offering materials, certain strategies may employ leverage (buying securities with borrowed money).

Some clients may not be able to hold all types of investment securities or participate in certain corporate actions due to client guideline or other restrictions.

Some accounts may not be able to hold foreign securities in ordinary form because of custodial limitations. Symphony may purchase ordinary shares of foreign securities in foreign markets and arrange for these ordinary shares to be converted into American Depository Receipts (“ADRs”). Fees and costs associated with the conversion and purchase of ADRs are typically included in the net price of the ADR and incurred by the purchasing account. Some portion of such costs may be attributable to local broker fees, stamp fees, and local taxes. Trades on foreign exchanges may incur greater transaction charges than trades on U.S. exchanges.

The following descriptions of strategy types and their investments are general in nature and may vary by client account. Investing in securities involves risk of loss that clients should be prepared to bear.

Credit Strategies

The primary types of investments in Symphony’s Credit strategies consist of senior bank loans, high yield bonds, convertible bonds and asset backed securities. As described below, these investment types are used to a greater or lesser extent depending on the strategy, and other asset types may be used as well.

Long-Short Credit strategy invests in or sell short securities, consisting principally, but not solely, of fixed income securities (including, without limitation, high yield, convertible and investment grade corporate bonds, and bank loans) that are traded in the public, 144A and over- the-counter markets as well as derivatives such as total return, credit default swaps, single name swaps, and index reference assets based on the foregoing instruments.

Many of the securities the strategy invests in are rated below investment grade, or are occasionally unrated, but that Symphony determines to be below investment grade quality or deems to be of comparative below investment grade quality. Securities rated below investment grade quality are commonly known as “high yield/high risk” or “junk bonds.” Junk bonds, while generally offering higher yields than investment grade securities with similar maturities and features, involve greater risks, including the possibility of default or bankruptcy. They are regarded as predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal. Convertible Arbitrage strategy invests in or sells short securities and other intangible investment instruments consisting principally, but not solely, of equity (including preferred and convertible preferred stocks) and fixed income securities (including corporate bonds) that are traded in the public, 144A and over-the-counter markets as well as derivatives such as total return and credit default swaps and single name swaps and index reference assets based on the foregoing instruments. Generally, each position taken by the strategy is long a convertible bond, preferred stock, convertible preferred stocks and short the underlying common stock (or vice-versa), a combination that is intended to minimize the risk of each individual position and thereby the portfolio. Event Driven Opportunities strategy invests in and sells short primarily, but not solely, U.S. and non-U.S. bonds (including high yield and convertible), loans, equity and equity-related securities, derivatives such as total return and credit default swaps on single name or index reference assets based on the foregoing assets. The strategy may also invest in collateralized obligations, notes, other indebtedness of any kind, exchange traded funds, preferred, convertible and other securities, options, warrants, rights, private claims, equity and debt derivatives, non-U.S. currencies, futures, options on futures, other commodity interests, other securities and instruments of U.S. and non-U.S. issuers that are traded publicly and privately, money market instruments, cash and cash equivalents.

The Credit strategies identified above regularly engage in short sales activity, and/or trading on margin, hedging and other investment strategies. Certain of the Credit strategies identified above may employ leverage as an investment technique.

Long-Only Credit strategies invest primarily in senior loans and/or high yield bonds. Assets may also be invested in subordinated loans, convertible securities, asset backed securities and other credit securities. Investments are described further in the risk sections below.

Certain Long-Only Credit strategies will invest in adjustable (floating) rate, U.S. dollar- denominated secured and unsecured senior loans. The strategies also may invest in U.S. dollar- denominated senior loans that are organized or located in countries outside the U.S. Adjustable rate loans pay interest at rates that are reset periodically by reference to a base lending rate. Adjustable rate loans are made to U.S. or non-U.S. corporations, partnerships and other business entities that operate in various industries and geographical regions, which may include middle- market companies. The strategies may also invest in subordinated loans.

Certain Long-Only Credit strategies invest in other fixed income securities, such as convertible securities, corporate bonds and other types of corporate debt instruments. The debt instruments may be traded over the counter or on an exchange. A majority or a substantial portion of a Long- Only Credit strategy’s assets may be invested in loans or high yield bonds. Certain strategies may also invest in derivatives, such as swaps and futures contracts on U.S. and non-U.S. bonds. Many of the bonds or high yield bonds the strategy invests in are below investment grade or, if unrated, deemed to be of comparative below investment grade quality.

The Long-Only Credit strategies may also represent a portion of a multi-strategy or diversified strategy portfolio that also includes strategies that invest in equity securities.
Equity Strategies

Long-Short Equity strategies are designed to capture investment opportunities in varying market conditions while adhering to stringent risk controls. The strategies primarily invest in and sell short large-cap equities and derivatives of U.S. and non-U.S. companies. Certain Long-Short Equity strategies may employ leverage as an investment technique.

Market Neutral Equity Portfolios are constructed to be market neutral, beta neutral and sector neutral where return is attributable to asset selection and not risk or industry biases. The portfolios primarily invest in and sell short large-cap equities and derivatives of U.S. and non-U.S. companies. Long-Only Equity strategies generally invest in equity securities of large-cap, mid-cap, small-mid cap or small cap companies. Certain strategies may pursue a growth, value, low volatility or core style of investing. In addition, certain strategies invest primarily in non-U.S. equity securities of issuers located in developed countries, but also may invest in equity securities of companies located in emerging market countries. As with any investment, loss of principal is a risk of investing in accordance with any of the investment strategies described above. Credit and Equity strategies described above also are subject to the risks summarized below, among others. In periods of market volatility, in all strategies Symphony may be unable to invest new money contributed to an account, or proceeds from the sale of securities, as quickly as it might have been able to do under normal market conditions. Similarly, Symphony may be unable to sell securities to raise cash, or to accommodate a terminating client’s request to sell securities, as quickly, or at favorable prices, as it might have been able to do under normal market conditions. Depending on market movements, such delays could have an adverse impact on client accounts. In such periods of market disruption, Symphony, when deemed advisable, also may deviate from its normal trading practices with respect to sequencing and allocation of transactions. Market volatility may also cause Symphony to deviate from applicable account guidelines. In such circumstances, Symphony will use reasonable efforts to restore the account to compliance with its guidelines in a prudent manner under the circumstances.

RISKS
As with any investment, loss of principal is a risk of investing in accordance with any of the investment strategies described above. This Brochure does not include every potential risk associated with an investment strategy, or all of the risks applicable to a particular portfolio. Rather, it is a general description of the nature and risks of Symphony’s principal strategies and the assets it invests client accounts in. The strategies described above are also subject to the risks listed below. General Risks

The following risks are generally applicable to Credit and Equity strategies. Liquidity Risk. Liquidity risk exists when particular investments are difficult to purchase or sell. An account’s investments in illiquid securities may reduce the returns of the account because it may be unable to sell the illiquid securities at an advantageous time or price. Additionally, the market for certain investments may become illiquid under adverse market or economic conditions independent of any specific adverse changes in the conditions of a particular issuer. In such cases, an account, due to potential limitations on investments in illiquid securities and the difficulty in purchasing and selling such securities or instruments, may be unable to achieve its desired level of exposure to a certain sector. Certain restricted securities Symphony’s strategies may invest in are securities that have not been registered under the Securities Act of 1933 (the “‘33 Act”), such as securities issued pursuant to Rule 144A, Regulation D or Regulation S under the ‘33 Act. Unregistered securities which may also be referred to as restricted securities are generally illiquid and not readily marketable. Restricted securities may not be resold to the public without an effective registration statement under the ’33 Act, or may be sold only in a privately negotiated transaction or pursuant to an exemption from registration. Illiquid securities involve the risk that the securities will not be able to be sold at the time desired or at prices approximating the value at which the securities are held.

Derivatives Risk. The use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. These risks include market risk, credit risk, management risk and liquidity risk, among others. Derivatives can be highly volatile, illiquid and difficult to value, and there is the risk that changes in the value of a derivative held by an account will not correlate with the underlying instruments or the account’s other investments. The use of derivatives can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivatives. Derivative instruments also involve the risk that a loss may be sustained as a result of the failure of the counterparty to the derivative instruments to make required payments or otherwise comply with the derivative instruments’ terms. These risks are heightened when the management team uses derivatives to enhance the account’s return or as a substitute for a position or security, rather than solely to hedge (or offset) the risk of a position or security held by an account. In addition, when an account invests in certain derivative securities, including, but not limited to, when-issued securities, forward commitments, futures contracts and interest rate swaps, it is effectively leveraging its investments, which could result in exaggerated changes in the account’s value and can result in losses that exceed the amount originally invested. The success of an account’s derivatives strategies will depend on Symphony’s ability to assess and predict the impact of market or economic developments on the underlying asset, index or rate and the derivative itself, without the benefit of observing the performance of the derivative under all possible market conditions.

An account may also enter into OTC and/or exchange traded transactions in derivatives. Transactions in the OTC markets generally are conducted on a principal-to-principal basis. The terms and conditions of these instruments generally are not standardized and tend to be more specialized or complex and the instruments may be harder to value. In general, there is less governmental regulation and supervision of transactions in the OTC markets than of transactions entered into on organized exchanges. In addition, certain derivative instruments and markets may not be liquid, which means an account may not be able to close out a derivatives transaction in a cost-efficient manner. Short positions in derivatives may involve greater risks than long positions, as the risk of loss on short positions is theoretically unlimited (unlike a long position, in which the risk of loss may be limited to the amount invested).

A portfolio may be subject to credit risk with respect to the counterparties to certain derivatives agreements entered into by the portfolio. If a counterparty becomes bankrupt or otherwise fails to perform its obligations under a derivative contract due to financial difficulties, the portfolio may experience significant delays in obtaining any recovery under the derivative contract in a bankruptcy or other reorganization proceeding. The portfolio may obtain only a limited recovery or may obtain no recovery in such circumstances.

Writing (selling) covered call options on some or all of a portfolio’s holdings subject the portfolio to additional risks. Because a covered call strategy limits participation in the appreciation of the underlying asset, in this case the securities, owning securities in a portfolio is not the same as an investment linked to the performance of the securities. By writing covered call options on the securities, a portfolio will give up the opportunity to benefit from potential increases in the value of the securities above the exercise prices of the options, but will continue to bear the risk of declines in the value of the securities. The premiums received from the options may not be sufficient to offset any losses sustained from the volatility of the securities over time.

A portfolio may purchase index put options to protect against a significant market decline over a short period of time. When index put options become expensive relative to the protection afforded a portfolio, the portfolio may reduce the amount of index put options to a level that is less than the full value of the portfolio. If a put option purchased by the portfolio is not sold or exercised when it has remaining value, the portfolio will lose its entire investment in the index put option. Also, where an index put option is purchased to hedge all or part of the portfolio, the price of the index put option may move more or less than the value of the index. Certain derivatives (e.g., futures, options on futures and swaps) may be considered commodities under financial regulations. In 2012, the CFTC adopted amendments to its rules, including those governing exemptions from CFTC registration as a commodity trading advisor or a commodity pool operator. Those amendments could subject Symphony to limitations with respect to its investment in commodity interests. In addition, the CFTC is continuing to propose, adopt, and implement regulations governing the trading of swaps and other derivatives that the CFTC regulates. Those regulations may impose recordkeeping, reporting, clearing, business conduct, and trade execution requirements, among other things. Compliance with these requirements, and other requirements that may be adopted in the future, may increase expenses or transaction costs for accounts. The regulation of commodity transactions in the United States is a rapidly changing area of law and is subject to ongoing modification by government, self-regulatory and judicial action. The effect of any future regulatory change is impossible to predict, but could be substantial and adverse. Hedging Risk. Portfolios may use derivatives or other transactions solely for purposes of hedging the portfolio's exposure to the risks including but not limited to increases in interest rates, common stock risk, high yield credit risk and foreign currency exchange rate risk that could result in poorer overall performance for the portfolio. There may be an imperfect correlation between a portfolio’s holdings and such hedges, which may prevent the portfolio from achieving the intended consequences of the applicable transaction or expose the portfolio to risk of loss. Further, the use of derivatives or other transactions to reduce risk involves costs and will be subject to an adviser’s ability to predict correctly changes in the relationships of such hedging instruments to the portfolio’s holdings or other factors. An adviser's judgment in this respect may not be correct. Consequently, the use of hedging transactions might result in a poorer overall performance for a portfolio, whether or not adjusted for risk, than if the portfolio had not hedged its holdings. A portfolio may not enter into hedging transactions at times or under circumstances in which it would be advisable to do so.

A purchase or sale of a futures contract may result in losses in excess of the amount invested in the futures contract. There may be an imperfect correlation between a portfolio’s holdings and futures contracts or options on futures contracts entered into by a portfolio, which may prevent the portfolio from achieving the intended hedge or expose the portfolio to risk of loss. The degree of imperfection of correlation depends on circumstances such as: variations in speculative market demand for futures, futures options and the related securities, including technical influences in futures and futures options trading and differences between the securities markets and the securities underlying the standard contracts available for trading. Further, a portfolio’s use of futures contracts and options on futures contracts to reduce risk involves costs and will be subject to an adviser’s ability to predict correctly changes in interest rate relationships or other factors.

Rule 144A Securities Risk – The market for Rule 144A securities typically is less active than the market for publicly-traded securities. Rule 144A securities carry the risk that their liquidity may become impaired and the portfolio may be unable to dispose of the securities promptly or at reasonable prices.

Investment Style Risk – Different types of securities and asset classes (e.g. equities vs. fixed income; large cap vs. small cap; value vs. growth; U.S. vs. international markets; developed vs. emerging markets, etc.) tend to shift in and out of favor depending on market and economic conditions. To the extent a portfolio emphasizes a particular type of investing or asset class, a portfolio runs the risk that such style or asset class will underperform relative to the benchmark index or portfolios with similar investment objectives managed by other investment managers.

Non-U.S. Securities Risk. Investments in securities of non-U.S. issuers involve special risks not presented by investments in securities of U.S. issuers, including the following: (i) less publicly available information about non-U.S. issuers or markets due to less rigorous disclosure or accounting standards or regulatory practices; (ii) many non-U.S. markets are smaller, less liquid and more volatile, meaning that in a changing market, an Adviser may not be able to sell the portfolio’s securities at times, in amounts and at prices it considers reasonable; (iii) potential adverse effects of fluctuations in currency exchange rates or controls on the value of the portfolio's investments; (iv) the economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession; (v) the impact of economic, political, social or diplomatic events; (vi) possible seizure, expropriation or nationalization of the company or its assets; (vii) certain non-U.S. countries may impose restrictions on the ability of non-U.S. issuers to make payments of principal and/or interest to investors located outside the U.S., due to blockage of foreign currency exchanges or otherwise; and (viii) withholding and other non-U.S. taxes may decrease the portfolio’s return. These risks are more pronounced to the extent that a portfolio invests a significant amount of its assets in companies located in one region. A portfolio may not enter into hedging transactions at times or under circumstances in which it might be advisable to do so. Economies and social and political climates in individual countries may differ unfavorably from the United States. Non-U.S. economies may have less favorable rates of growth of gross domestic product, rates of inflation, currency valuation, capital reinvestment, resource self-sufficiency and balance of payments positions. Many countries have experienced substantial, and in some cases extremely high, rates of inflation for many years. Unanticipated economic, political and social developments may also affect the values of the portfolio's investments and the availability to the portfolio of additional investments in such countries. Non-U.S. securities risks are magnified for investments in developing or emerging markets. To the extent a portfolio invests in depositary receipts (ADRs), a portfolio will be subject to many of the same risks as when investing directly in non-U.S. securities.

Currency Risk. Currency risk is the risk that fluctuations in the exchange rates between the U.S. dollar and non-U.S. currencies may negatively affect an investment. The value of securities denominated in non-U.S. currencies may fluctuate based on changes in the value of those currencies relative to the U.S. dollar, and a decline in applicable foreign exchange rates could reduce the value of such securities held by a portfolio. The values of non-U.S. investments and the investment income derived from them also may be affected unfavorably by changes in currency exchange control regulations.

Inflation Risk. Inflation risk is the risk that the value of assets or income from investment will be worth less in the future as inflation decreases the value of money. As inflation increases, the value of a portfolio’s assets can decline, as can the value of a portfolio’s distributions.

Deflation Risk. Deflation risk is the risk that prices throughout the economy decline over time, which may have an adverse effect on the market valuation of companies, their assets and revenues, and the valuation of real estate. In addition, deflation may have an adverse effect on the creditworthiness of issuers and may make issuer default more likely, which may result in a decline in the value of the portfolio.

Short Selling Risk. Strategies that include short selling will incur a loss as a result of a short sale if the price of the security sold short increases in value between the date of the short sale and the date on which the account purchases the security to replace the borrowed security. In addition, a lender may request, or market conditions may dictate, that securities sold short be returned to the lender on short notice, which may result in the account having to buy the securities sold short at an unfavorable price. If this occurs, any anticipated gain to the account may be reduced or eliminated or the short sale may result in a loss. In a rising stock or bond market, an account’s short positions may significantly impact the account’s overall performance and cause the account to underperform traditional long-only strategies or to sustain losses, particularly in a sharply rising market. The use of short sales may also cause the account to have higher expenses than long only accounts. Short sales are speculative transactions and involve special risks, including greater reliance on Symphony’s ability to accurately anticipate the future value of a security. Because losses on short sales arise from increases in the value of the security sold short, such losses are theoretically unlimited. By contrast, a loss on a long position arises from decreases in the value of the security and is limited by the fact that a security’s value cannot go below zero. The combination of short sales with long positions in an account’s portfolio in an attempt to improve performance or reduce overall portfolio risk may not be successful and may result in greater losses or lower positive returns than if the account held only long positions. It is possible that an account’s long securities positions will decline in value at the same time that the value of its short securities positions increase, thereby increasing potential losses to the account. In addition, an account’s short selling strategies may limit its ability to fully benefit from increases in the equity markets. To the extent an account invests the proceeds received from selling securities short in additional long positions, the account is engaging in a form of leverage. The use of leverage may increase the account’s exposure to long positions and make any change in the account’s value greater than it would be without the use of leverage. This could result in increased volatility of returns. Leverage Risk. A portfolio may invest on margin and may employ other leveraging strategies, which can increase profit potential, but at the same time increase risk of loss and volatility. In addition, margin trading requires the pledge of portfolio securities as collateral, and margin calls can result in the portfolio being required to pledge additional collateral or liquidate the portfolio’s holdings, which could require a portfolio to sell portfolio securities at substantial losses that would not otherwise be realized.

Counterparty Risk. Changes in the credit quality of the companies that serve as counterparties with respect to derivatives or other transactions supported by another party’s credit may affect the value of those instruments. Certain entities that have served as counterparties in the markets for these transactions have incurred and may in the future incur significant losses and financial hardships including bankruptcy as a result of exposure to lower quality credit investments that have experienced defaults or otherwise suffered credit deterioration. As a result, such hardships have reduced these entities’ capital and called into question their continued ability to perform their obligations under such transactions. By using derivatives or other transactions, an account assumes the risk that its counterparties could experience similar financial hardships. In the event of insolvency of a counterparty, an account may sustain losses or be unable to liquidate a derivatives position. The counterparty risk for cleared derivatives is generally lower than for uncleared over-the-counter (“OTC”) derivative transactions since generally a clearing organization becomes substituted for each counterparty to a cleared derivative contract and, in effect, guarantees the parties’ performance under the contract as each party to a trade looks only to the clearing house for performance of financial obligations. However, there can be no assurance that the clearing house, or its members, will satisfy its obligations to an account.

Real Estate Securities and Sector Risk. Certain of the portfolios may invest in REITs. Equity REITs will be affected by changes in the value of and income from the properties they own, while mortgage REITs may be affected by the credit quality of the mortgage loans they hold. REITs are also dependent on specialized management skills, which may affect their ability to generate cash flow for operating purposes and to pay distributions. Additionally, REITs may have limited diversification and are subject to the risks associated with obtaining financing for real property. A real estate securities portfolio may invest a majority of its assets in REITs and in the real estate sector. Stocks within specific industries or sectors can periodically perform differently than the overall stock market due to changes impacting that particular industry or sector.

Market Risk. The market values of securities owned by the portfolios may decline, at times sharply and unpredictably. Market values of securities are affected by a number of different factors. For equity securities, market risk may be more significant in small and mid- capitalization companies. Market values of fixed income securities may be affected by changes in interest rates, the credit quality of issuers, and general economic and market conditions. These risks may be magnified for lower-quality fixed income securities. Regulatory Risk. To the extent that legislation or state or federal regulators that regulate certain financial institutions impose additional requirements or restrictions with respect to the ability of such institutions to make loans, particularly in connection with highly leveraged transactions, the availability of senior loans or adjustable rate loans for investment may be adversely affected. Further, such legislation or regulation could depress the market value of senior loans or adjustable rate loans. In recent years, instability in the financial markets has led the U.S. government to take a number of actions designed to support certain financial institutions and segments of the financial markets that have experienced extreme volatility, and in some cases a lack of liquidity. Most significantly, the U.S. government has enacted a broad-reaching new regulatory framework over the financial services industry and consumer credit markets, the potential impact of which on the value of securities held by an account is unknown. Federal, state, and other governments, their regulatory agencies, or self-regulatory organizations may take actions that affect the regulation of the instruments in which an account invests, or the issuers of such instruments, in ways that are unforeseeable. Governments or their agencies may also acquire distressed assets from financial institutions and acquire ownership interests in those institutions. The implications of government ownership and disposition of these assets are unclear, and such a program may have positive or negative effects on the liquidity, valuation and performance of an account’s holdings. Furthermore, volatile financial markets can expose accounts to greater market and liquidity risk and potential difficulty in valuing portfolio instruments held by accounts. The value of an account’s holdings is also generally subject to the risk of future local, national, or global economic disturbances based on unknown weaknesses in the markets in which an account invests. In the event of such a disturbance, issuers of securities held by a portfolio may experience significant declines in the value of their assets and even cease operations, or may receive government assistance accompanied by increased restrictions on their business operations or other government intervention. In addition, it is not certain that the U.S. government will intervene in response to a future market disturbance and the effect of any such future intervention cannot be predicted. It is difficult for issuers to prepare for the impact of future financial downturns, although companies can seek to identify and manage future uncertainties through risk management programs.

Considerable additional regulatory attention has been focused on financial services companies and products. The Dodd-Frank Act regulates markets, market participants and financial instruments that previously have been unregulated and substantially alters the regulation of many other markets, market participants and financial instruments. Because many provisions of the Dodd-Frank Act require rulemaking by the applicable regulators before becoming fully effective and the Dodd-Frank Act mandates multiple agency reports and studies (which could result in additional legislative or regulatory action), it is difficult to predict the impact of the Dodd-Frank Act on a portfolio, and the markets in which portfolios may invest. The Dodd-Frank Act could result in a portfolio’s investment strategy becoming non-viable or non-economic to implement. Therefore, the Dodd-Frank Act and regulations adopted pursuant to the Dodd-Frank Act could have a material adverse impact on the profit potential of an account.

Global Economic Risk. Global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country, region or market might adversely impact issuers in a different country, region or market. Changes in legal, political, regulatory, tax and economic conditions may cause fluctuations in markets and securities prices around the world, which could negatively impact the value of securities. For example, in a June 2016 referendum, citizens of the United Kingdom (“UK”) voted to leave the European Union (“EU”). It is expected that the UK will formally withdraw from the EU in due course. During this period and beyond, the impact on the UK and European economies and the broader global economy could be significant, resulting in negative impacts, such as increased volatility and illiquidity, potentially lower economic growth and decreased asset valuations. The UK vote to leave the EU may have a destabilizing impact on the EU to the extent other member states similarly seek to withdraw from the union. It may also have a negative impact on the economy and currency of the UK as a result of anticipated or actual changes to the UK’s economic and political relations with the EU. Any or all of these challenges may affect the value of a portfolio’s investments economically tied to the UK or EU. Similar major economic or political disruptions, particularly in large economies like China’s, may have global negative economic or political repercussions. Additionally, geopolitical events, such as war, terrorism, natural and environmental disasters, and market manipulation, may disrupt securities markets and adversely affect global economics and markets. Examples of such events include recent hurricanes in the Caribbean Sea and southern United States and heightened concerns regarding North Korea’s nuclear weapons and long-range ballistic missile programs. Governmental and quasi-governmental authorities and regulators throughout the world have responded to turmoil with a variety of significant fiscal and monetary policy changes, including but not limited to, direct capital infusions into companies, new monetary programs and dramatically lower interest rates. An unexpected or quick reversal of these policies, or the ineffectiveness of these policies, could increase volatility in securities markets.
Fixed Income Securities and Senior Bank Loan Risks

Bond Market Liquidity Risk. Dealer inventories of bonds, which provide an indication of the ability of financial intermediaries to “make markets” in those bonds, are at or near historic lows in relation to market size. This reduction in market making capacity has the potential to decrease liquidity and increase price volatility in the fixed income securities and/or markets, particularly during periods of economic or market stress. As a result of this decreased liquidity, an account may have to accept a lower price to sell a security, sell other securities to raise cash, or give up an investment opportunity, any of which could have a negative effect on performance. CLO Risk. There are numerous risks associated with investment in a CLO, including that interests in a CLO have limited liquidity and there are restrictions on their transfer; the CLO may have limited assets to make payment on the securities; certain securities issued by the CLO are subject to greater risk of nonpayment than more senior tranches; the holders of securities may have limited rights to proceed against defaulting borrowers; and the loans held by the CLO consist primarily of non-investment grade loans or interests in non-investment grade loans and high-yield debt securities, which are subject to liquidity, market value, credit, interest rate, reinvestment and certain other risks. Investors should carefully review a CLO’s private offering memorandum.

Senior Loan Risk. Senior loans are typically private corporate loans negotiated by one or more commercial banks and syndicated among a group of commercial banks and institutional investors. Borrowers often take out senior loans in connection with a highly leveraged transaction, often to finance internal growth, acquisitions, mergers, stock purchases, or for other reasons. Senior loans are typically at the most senior level of the capital structure, and are often secured by specific collateral, including but not limited to, intellectual property, accounts receivable, inventory, equipment, buildings, real estate, franchises and common and preferred stock of the borrower. Certain senior loans may be unsecured. Senior loans often contain restrictive covenants designed to limit the activities of the borrower in an effort to protect the right of lenders to receive timely payments of interest on and repayment of principal of the loans. Because of the provision of confidential information, the unique and customized nature of a loan agreement, and the private syndication of the loan, senior loans are not as easily purchased or sold as a publicly traded security. Long-Only Credit strategies may invest in senior loans that are rated below investment grade, or unrated but judged to be of comparable quality.

Senior loans may not be rated by a nationally recognized statistical rating organization at the time of investment. Senior loans are not securities and are not registered with the Securities and Exchange Commission nor are loans listed on a securities exchange. In addition, the amount of public information available with respect to senior loans generally will be less extensive than that available for more widely traded, registered and exchange-listed securities. Because the interest rates of senior loans reset frequently, if market interest rates fall, the loans’ interest rates may be reset to lower levels, potentially reducing a portfolio's income. The size of the trading market for senior loans is generally smaller than that for registered equities and investment grade rated bond securities; as such, senior loans may be relatively illiquid compared to those types of securities. Liquidity relates to the ability of a portfolio to sell an investment in a timely manner at a price approximately equal to its value on the portfolio’s books. A portfolio’s ability to realize the full value of its assets may be impaired in the event of a voluntary or involuntary liquidation of any illiquid assets. However, many senior loans are of a large principal amount and are held by a wide array of institutional investors. The market for below investment grade rated senior loans is similar in size and liquidity to the market for below investment grade rated bonds. In the event of an economic downturn, a substantial increase or decrease in interest rates, or other type of market dislocation, the market for senior loans may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods. In those instances senior loans may be difficult to value and prices provided by external pricing services may not reflect the true fair value of the assets. Borrowers who issue senior loans may default on their obligations to pay principal or interest when due. This non-payment would result in a reduction of income to a portfolio and a reduction in the value of a senior loan experiencing non-payment. Although some senior loans in which a portfolio will invest will be secured by specific collateral, there can be no assurance that liquidation of such collateral would satisfy the borrower’s obligation in the event of non-payment of scheduled interest or principal or that such collateral could be readily liquidated. In the event of bankruptcy of a borrower, the portfolio could experience delays or limitations in its ability to realize the benefits of any collateral securing a senior loan.

A portfolio also may purchase a participation interest in a senior loan and by doing so acquire some or all of the interest of the bank or other lending institution making the loan to a corporate borrower. A participation interest typically results in the portfolio having a contractual relationship with the lender and not the borrower. In this instance, the portfolio will have the right to receive payments of principal, interest and any fees to which it is entitled only from the bank or other lending institution selling the participation and only upon receipt by the bank or other lending institution of the payments from the borrower. Since the portfolio has only acquired a participation in the loan made by a third party (i.e. the banker, other lending institution or seller), the portfolio may not be able to control the exercise of any remedies that such third party would have under the senior loan. Although the participation interest is in a senior loan, there can be no assurance that the principal and interest owed on the senior loan will be repaid in full.

Investors in loans may not be entitled to rely on the anti-fraud protections of the federal securities laws, although they may be entitled to certain contractual remedies and their rights under common law.

Loan Settlement Risk. Purchases and sales of loans have an industry suggested settlement time of T+7. However, loans in the secondary market may vary in their settlement times, from same day settlement to a 2017 market average secondary settlement time of T+20 to in some cases much longer. Unlike the securities markets, there is no central clearinghouse for loan trades.

Credit Risk. Credit risk is the risk that an issuer may be unable or unwilling to make dividend, interest and principal payments when due and the related risk that the value of a debt instrument may decline because of concerns about the issuer’s ability to make such payments.

Credit risk may be heightened for the portfolios that invest a substantial portion of their assets in “high yield” debt or loans with low credit ratings. These securities, while generally offering higher yields than investment-grade debt with similar maturities, involve greater risks, including the possibility of interest deferral, default or bankruptcy, and are regarded as predominantly speculative with respect to the issuer’s capacity to pay dividends or interest and repay principal. Companies that issue high yield debt or loans tend to be highly leveraged and thus are more susceptible to the risks of interest deferral, default and/or bankruptcy. High Yield Risk. Securities of below investment grade quality are regarded as having predominately speculative characteristics with respect to capacity to pay interest and repay principal, and are commonly referred to as junk bonds. Issuers of high yield securities may be highly leveraged and may have fewer methods of financing available. The prices of these lower grade securities are typically more sensitive to negative developments, such as a decline in the issuer's revenues or a general economic downturn, than are the prices of higher grade securities. The secondary market for high yield securities may not be as liquid as the secondary market for more highly rated securities, a factor which may have an adverse effect on a portfolio’s ability to dispose of a particular security. There are fewer dealers in the market for high yield securities than for investment grade obligations. The prices quoted by different dealers may vary significantly and the spread between the bid and ask price is generally much larger than for higher quality instruments. Under adverse market or economic conditions, the secondary market for high yield securities could contract further, independent of any specific adverse changes in the condition of a particular issuer, and these instruments may become illiquid. As a result, a portfolio could find it more difficult to sell these securities or may be able to sell the securities only at prices lower than if such securities were widely traded. Income Risk. If interest rates fall, the income from the portfolios will decline as the portfolios invest the proceeds from share sales, or from matured or called debt instruments, at interest rates that are below the portfolio’s current earnings rate.

Interest Rate Risk. Interest rate risk is the risk that fixed-income securities, and to a lesser extent dividend-paying common stocks, will decline in value because of changes in market interest rates. When market interest rates rise, the market value of such securities generally will fall. Market interest rates in the U.S. and certain other countries currently are near historically low levels. A portfolio may be subject to a greater risk of rising interest rates than would normally be the case due to the current period of historically low rates and the effect of potential government fiscal policy initiatives and resulting market reaction to those initiatives. Prepayment Risk. During periods of declining interest rates, the issuer of certain types of securities may exercise its option to prepay principal earlier than scheduled, forcing a portfolio to reinvest in lower yielding securities. This is known as call or prepayment risk. Debt securities frequently have call features that allow the issuer to repurchase the security prior to its stated maturity. An issuer may redeem an obligation if the issuer can refinance the debt at a lower cost due to declining interest rates or an improvement in the credit standing of the issuer.

Extension Risk. During periods of rising interest rates, the average life of certain types of securities may be extended by the issuer because of lower than expected principal payments. This may lock in a below market interest rate, increase the security's duration and reduce the value of the security. This is known as extension risk. Market interest rates for investment grade fixed-income securities are currently significantly below the historical average rates for such securities. This decline may have increased the risk that these rates will rise in the future; however, historical interest rate levels are not necessarily predictive of future interest rate levels.

Reinvestment Risk. Reinvestment risk is the risk that income from a portfolio will decline if and when the portfolio invests the proceeds from matured, traded or called bonds or loans at market interest rates that are below the portfolio’s current earnings rate.

Convertible Security Risk. Convertible securities generally offer lower interest or dividend yields than non-convertible fixed-income securities of similar credit quality because of the potential for capital appreciation. The market values of convertible securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. However, a convertible security's market value also tends to reflect the market price of the common stock of the issuing company, particularly when the stock price is greater than the convertible security's conversion price. The conversion price is defined as the predetermined price or exchange ratio at which the convertible security can be converted or exchanged for the underlying common stock. As the market price of the underlying common stock declines below the conversion price, the price of the convertible security tends to be increasingly influenced more by the yield of the convertible security than by the market price of the underlying common stock. Thus, it may not decline in price to the same extent as the underlying common stock, and convertible securities generally have less potential for gain or loss than common stocks. However, mandatory convertible securities (as discussed below) generally do not limit the potential for loss to the same extent as securities convertible at the option of the holder. In the event of a liquidation of the issuing company, holders of convertible securities would be paid before that company's common stockholders. Consequently, an issuer's convertible securities generally entail less risk than its common stock. However, convertible securities fall below debt obligations of the same issuer in order of preference or priority in the event of a liquidation and are typically unrated or rated lower than such debt obligations. In addition, contingent payment convertible securities allow the issuer to claim deductions based on its nonconvertible cost of debt, which generally will result in deductions in excess of the actual cash payments made on the securities (and accordingly, holders will recognize income in amounts in excess of the cash payments received). Mandatory convertible securities are distinguished as a subset of convertible securities because the conversion is not optional and the conversion price at maturity is based solely upon the market price of the underlying common stock, which may be significantly less than par or the price (above or below par) paid. For these reasons, the risks associated with investing in mandatory convertible securities most closely resemble the risks inherent in common stocks. Mandatory convertible securities customarily pay a higher coupon yield to compensate for the potential risk of additional price volatility and loss upon conversion. Because the market price of a mandatory convertible security increasingly corresponds to the market price of its underlying common stock as the convertible security approaches its conversion date, there can be no assurance that the higher coupon will compensate for the potential loss. Preferred Stocks Risk. Preferred stocks involve credit risk, which is the risk that a preferred stock in a portfolio will decline in price or fail to make dividend payments when due because the issuer of the security experiences a decline in its financial status. In addition to credit risk, investments in preferred stocks involve certain other risks. Certain preferred stocks contain provisions that allow an issuer under certain circumstances to skip distributions (in the case of “non-cumulative” preferred stocks) or defer distributions (in the case of “cumulative” preferred stocks). If a portfolio owns a preferred stock that is deferring its distributions, the portfolio may be required to report income for tax purposes while it is not receiving income from that stock. In certain varying circumstances, an issuer may redeem its preferred stock prior to a specified date in the event of certain tax or legal changes or at the issuer’s call. In the event of a redemption, a portfolio may not be able to reinvest the proceeds at comparable rates of return. Preferred stocks typically do not provide any voting rights, except in cases when dividends are in arrears for a specified number of periods. Preferred stocks are subordinated to bonds and other debt instruments in a company's capital structure in terms of priority to corporate income and liquidation payments, and therefore will be subject to greater credit risk than those debt instruments.

New Types of Securities. New types of securities that pay tax-advantaged dividends, including preferred securities having features other than those described herein, may in the future be offered. Portfolios may invest in such securities if doing so would be consistent with a portfolio’s investment objective. Because the market for these instruments would be new, a portfolio may have difficulty selling them at a suitable price and time. These instruments may present other risks, such as high price volatility.

Sovereign Debt Risk. The ability of a non-U.S. sovereign issuer, especially in an emerging market country, to make timely and ultimate payments on its debt obligations will be strongly influenced by the sovereign issuer's balance of payments, including export performance, its access to international credits and investments, fluctuations of interest rates and the extent of its foreign reserves. A country whose exports are concentrated in a few commodities or whose economy depends on certain strategic imports could be vulnerable to fluctuations in international prices of these commodities or imports. To the extent that a country receives payment for its export in currencies other than dollars, its ability to make debt payments denominated in dollars could be adversely affected. If a sovereign issuer cannot generate sufficient earnings from foreign trade to service its external debt, it may need to depend on continuing loans and aid from foreign governments, commercial banks, and multinational organizations. There may not be bankruptcy proceedings similar to those in the U.S. by which defaulted interest may be collected. A portfolio may invest in debt of issuers located in countries considered to be emerging markets, and investments in such securities are particularly speculative. Heightened risks of investing in emerging markets sovereign debt include:
• Risk of default by a governmental issuer or guarantor. In the event of a default, a portfolio may have limited legal recourse against the issuer and/or guarantor.
• Risk of restructuring certain debt obligations. This may include reducing and rescheduling interest and principal payments or requiring lenders to extend additional credit, which may adversely affect the value of these investments.

In addition, risks of investing in emerging markets securities include: smaller market capitalization of securities markets, which may suffer periods of relative illiquidity; significant price volatility; restrictions on foreign investment; and possible repatriation of investment income and capital. In addition, foreign investors may be required to register the proceeds of sales; future economic or political crises could lead to price controls, forced mergers, expropriation or confiscatory taxation, seizure, nationalization, or creation of government monopolies. The currencies of emerging market countries may experience significant declines against the U.S. dollar, and devaluation may occur subsequent to investments in these currencies. Inflation and rapid fluctuations in inflation rates have had, and may continue to have, negative effects on the economies and securities markets of certain emerging market countries.

Repurchase Agreement Risk. If the party agreeing to repurchase specific securities should default, a portfolio may seek to sell the securities which it holds as collateral. This could involve transaction costs or delays in addition to a loss on the securities if their value should fall below their repurchase price. Repurchase agreements maturing in more than seven days are considered to be illiquid securities.

Valuation Risk. The debt securities in which a portfolio may invest typically are valued by a pricing service utilizing a range of market-based inputs and assumptions, including readily available market quotations obtained from broker-dealers making markets in such instruments, cash flows and transactions for comparable instruments. There is no assurance that a portfolio will be able to sell a security at the price established by the pricing service, which could result in a loss to the portfolio. Pricing services generally price debt securities assuming orderly transactions of an institutional “round lot” size, but some trades may occur in smaller, “odd lot” sizes, often at lower prices than institutional round lot trades.

Recent Events in the Fixed Income Markets. Following the financial crisis that began in 2007, the Board of Governors of the Federal Reserve System sought to stabilize the U.S. economy by keeping the federal funds rate at or near zero percent. In addition, the Federal Reserve, in a program called Quantitative Easing purchased securities issued or guaranteed by the U.S. government, its agencies or instrumentalities on the open market. As the Federal Reserve has begun to raise the federal funds rate, there is a risk that interest rates across the U.S. financial system will rise. These policy changes may expose fixed-income (including municipal bonds) and related markets to heightened volatility and may reduce liquidity for certain investments, which could cause the value of a portfolio’s investments to decline.

Equity Risks
Common Stock Risk. Stocks may decline significantly in price over short or extended periods of time. Price changes may occur in the market as a whole, or they may occur in only a particular country, company, industry, or sector of the market. In addition, the types of stocks in which a particular portfolio invests, such as value stocks, growth stocks, large-capitalization stocks, mid- capitalization stocks, small-capitalization stocks and/or micro-capitalization stocks, may underperform the market as a whole. In addition, growth stocks can be more volatile than other types of stocks. Value stocks can continue to be undervalued by the market for long periods of time. Additionally, dividends paid on common stocks can vary significantly over the short-term and long-term. Dividends on common stocks are not fixed, but are declared at the discretion of an issuer’s board of directors. There is no guarantee that the issuers of common stocks in which a portfolio invests will declare dividends in the future or that if declared they will remain at current levels or increase over time. Small-Cap please register to get more info