Today marks the 100th edition of Hybrid Vigor. Please, if you will, allow us this opportunity to reflect on the letter, our firm, and where we go from here.

We founded Hillside Advisors a little over two years ago for several reasons. We saw traditional convertible dealers, reacting to lower volumes and issuance in a low-rate environment, backing away from not only capital commitment but also research. We saw good people being laid off, which is not unusual, but having a very difficult time finding new seats, which is, or at least used to be, less common. We also saw an even longer-term void in innovative convertible analysis. The old credit/volatility dichotomy has always had its limits—garbage in, garbage out being first among them—but that modeling approach has become especially flawed in an environment increasingly dominated by long-only investors.

So we saw an opportunity to build a new kind of research and consulting firm, centered around but not limited to convertibles. After all, we think you can make a good case that convertibles are really the core asset class, and equity and debt are simply aggressive and conservative derivatives of them. We saw an opportunity to bring good people on board to write imaginative, unfettered research. We sought consulting work to keep these people busy—and compensated—between newsletters. And we sought to become known as the unconstrained “voice” of the convertibles, an asset class that we feel punches far above its weight in the capital markets but still suffers from an appalling lack of intellectual sponsorship and publicity. That lack of sponsorship goes for representation both to the investing public and to the universe of potential issuers. Sadly, some of the worst offenders have become convertible professionals who have failed to publicize the asset class’ benefits even—perhaps especially in some cases—in a perilous low-rate environment.

We think we’ve been a qualified success. Hybrid Vigor has gotten a great deal of acclaim from people we respect, though we look forward to the days when our loyal subscriber base will be larger. We continue to be involved in important consulting projects and are getting more and more inquiries as the word about our achievements spreads. People who contribute to Hybrid Vigor have found good jobs even in a brutal market and tell us that keeping active and sharp was invaluable to their search. And our proprietary risk and rating measures have become part of the convertible dialogue beyond the walls of Hillside Advisors.

But our business, two years on, is still very much a work in progress. (Aren’t they all?) We’re always looking for good contributors who can write anywhere on the equity/debt spectrum—small-cap and high-yield in particular. We expect to announce two alliances in the coming months as we broaden our capabilities to help asset managers use our proprietary tools. In short, we’ve got a lot going on, but we want even more. Kathy Hay Stine, our new Senior Advisor, will be helping us extend our sphere of influence. Talk with her about how we can help you.

Thanks for all your interest and support since our first issue of Hybrid Vigor came out nearly two years ago. To paraphrase Al Pacino in “Scent of a Woman,” we’re just getting warmed up.

(This is the cover letter for the subscription-based weekly Hillside's Hybrid Vigor newsletter. For a complete copy, please contact John Anderson at + 1 (646) 712-9289 x 107).