Nancy Zimmerman: People, Process, and Fixed Income Arbitrage at Bracebridge Capital

Fixed income arbitrage relies on identifying inefficiencies across substantially similar instruments, a strategy that has sustained Bracebridge Capital for over three decades. Nancy Zimmerman, co-founder of the firm, highlights that enduring market mispricings stem from constrained economic agents, benchmark-driven passive investing, and structural market segmentations. Success requires rigorous stress testing, a deep understanding of institutional arrangements, and the ability to distinguish between temporary drawdowns and permanent capital impairment. By maintaining a focus on technical expertise and curiosity, the firm navigates complex environments—ranging from developed market rates to emerging market credit—to deliver uncorrelated alpha. Beyond technical modeling, the investment process centers on aligning incentives with clients and fostering a team capable of adapting to evolving market dynamics. This approach transforms mathematical puzzles into consistent, risk-adjusted returns while navigating the complexities of modern financial ecosystems.