President Donald Trump’s ongoing trade war continues to ratchet up uncertainty, causing many solid businesses to become increasingly vulnerable as profits and cash reserves take a hit. Of course, even in times of stability and growth, fundamentally sound companies can face credit stress for any number of reasons—and still represent a good investment.
For investors willing to think opportunistically and long-term, investing in stressed and distressed credit of public companies can—and has—led to strong returns. That’s certainly been the case for Lipper and FundGradeA+ Award winner Pender Corporate Bond Fund, which is Pender’s flagship credit strategy and has been recognized for its consistent performance.
The Pender credit investment team has extensive bankruptcy and restructuring experience investing in stressed and distressed credits over the last decade as part of the broader investment strategy of the Pender Corporate Bond Fund.
To focus exclusively on the opportunity set in stressed and distressed credit, Pender is bringing their innovative approach to the alternative credit in Canada to another fund: Pender Credit Opportunities Fund.
Canadian Family Offices recently sat down with Parul Garg, associate portfolio manager of the Pender Credit Opportunities Fund, to talk about Pender’s approach, the fund, and the role this type of investing can play in a family office.
What is Pender’s approach to investing, specifically within the Pender Credit Opportunities Fund?
Pender was established in Vancouver in 2003 as an independent, employee-owned investment firm focused largely on private equity and venture capital. In 2009, we launched mutual funds with Pender Small Cap Opportunities Fund and Pender Corporate Bond Fund. The firm sets itself apart from competitors, and we believe our success is based on providing strategies focused on inefficient parts of the market, where asset prices don’t reflect their true value. We are active managers and within the Pender Credit Opportunities Fund I am very involved in each of our investments. When the credit team assesses an investment, we focus on the business. Are the fundamentals intact for the long term? We are business analysts first, then security analysts. We are not afraid of volatility because we see it as an opportunity, not a risk.
Within Pender Credit Opportunities Fund we are long term investors with a special focus on good companies that are going through a period of uncertainty and stress—an underserved part of the alternative credit space because it requires a lot of work and deep specialization that we are very excited about. Today, the team responsible for managing this fund oversees $2.6 billion in fixed income securities.
Parul, you started your career as a software engineer. What attracted you to finance and Pender?
My first job after graduation was with Accenture creating a user interface for Bank of America’s trading platform. To do that kind of work, you need to understand the product. I had six months of training in fixed income and equities, and I knew I had to be on that side of the table. My next job was with a private investment firm called Future First, where I traded the yield curve of Europe—that was my entry into finance. As an engineer, I’m used to working within a framework, and math is my language. When you talk about bond yields and how the price moves, how you value credit, it’s all math. I joined Pender’s Corporate Bond Fund portfolio management team in 2015—a perfect fit. It’s been 10 years, and I love each day.
Why was this the right time to launch Pender Credit Opportunities Fund?
Our flagship corporate bond fund has grown from $100 million in 2015 to more than $2.6 billion today and is consistently in the top quartile in performance over three, five and 10 years, according to *Morningstar data. One of the key differentiators of the strategy is investing in stressed and distressed companies—something few other independent firms in Canada do. It’s a very idiosyncratic risk-to-reward and you need to work very hard. You have to understand the bankruptcy process; you have to file your claims and then make the deal in a way that the company is restructured properly. Over the past 10 years, we have honed our skills, created a solid infrastructure, built a strong team with extensive experience in bankruptcy, restructuring and due diligence, and developed an effective stressed and distressed investing process. In 2023, after successfully running the strategy within our larger flagship fund, we decided to launch a closed-end version of Pender Credit Opportunities Fund. It delivered a solid return and in 2025 we launched an evergreen version for clients who want to diversify their portfolio with a proven alternative credit strategy.
What is the strategy guiding Pender Credit Opportunities Fund?
Our focus is to invest in good-quality, deeply discounted, publicly traded stressed and distressed small and mid-market high-yield companies—a market that has largely been ignored by bigger funds.
This may include companies facing a liquidity crisis, an over-levered balance sheet, bankruptcy or project delays. While many investors may think of bankruptcy as terrible, we see it as an opportunity for otherwise good companies to reset. It’s a natural deleveraging of a company because the bonds will convert into equity and the bondholders will become equity owners. We won’t touch companies where the terminal value is going to zero, or where the industry or jurisdiction is outside of our circle of competence.
Who is this fund for?
Institutions, family offices and high-net-worth investors who are looking to diversify their credit portfolios and want total transparency and tax efficiency. We invest in public companies, which means financials are available and easy to access, and most of the returns are capital gains, not income, reducing the tax burden of investing in fixed income. Restructuring might take six months to a year, which is why the fund is locked for two years, so investors typically have longer time horizons. Our goal, though, is to outperform private credit.
What role can Pender Credit Opportunities Fund play in a family office?
It is a return enhancer that allows family offices to enter a new asset class with transparency to the underlying holdings and their prices, especially if you are looking for a long-term strategic allocation to credit. We see the next five years as a golden period for this strategy as maturing debt and tighter financial conditions are expected to create opportunities in the credit of good companies, going through some stress.
*Source: Morningstar July 31, 2025.
This story was created by Canadian Family Offices’ commercial content division on behalf of PenderFund Management, which is a member and content provider of this publication.