A conversation with Canyon Partners' Josh Friedman ’82

Quick Overview

Josh Friedman, CFO of Canyon Partners and a Harvard Law/Business alumnus, explained that his father's advice to start his own business, not work for others, influenced his early career decisions, leading him to focus on credit-oriented investing rather than purely equity-focused strategies, which he found more intellectually interesting and less risky, especially given the high interest rates and regulatory environment of the time.

Key Points: Josh Friedman, Canyon Partners CFO and HLS/HBS alum, followed his father's advice to start his own business rather than working for others. Friedman initially worked at Drexel Burnham Lambert, but found the environment of high-leverage, high-risk deals less appealing. He co-founded Canyon Partners, which initially focused on high-yield debt, structuring it as a hedge fund with proprietary capital and a 15-22% expected return, which was high for the time. He noted that Canyon's initial focus was on credit-oriented assets, like distressed mortgage-backed securities and corporate debt, which he found more interesting than pure equity. Friedman contrasted his firm's approach with the Silicon Valley trend of aggressive startup financing, emphasizing the importance of being credit-oriented and managing risk, especially when dealing with high-yield assets. He credits his early experience, including his law school roommate's career path in bankruptcy law, for shaping his understanding of risk and deal structures. The firm's success, in part, came from navigating the regulatory landscape where traditional banks were constrained, allowing Canyon to deploy capital more effectively in areas like distressed debt.

Context: The video features an interview with Josh Friedman, CFO and co-founder of Canyon Partners, who is also a graduate of both Harvard Law School (HLS) and Harvard Business School (HBS). The discussion centers on his career path, the founding philosophy of Canyon Partners, and the differences between credit-oriented investing (like Canyon's focus) and traditional equity investing, particularly in the context of the high-interest-rate and regulatory environment of the early 1980s when he began his career.