How Low Can Your Return Go?

[Charles Worth]

As returns seems to have compressed in most markets, I thought it may be interesting to ask the following question(s) to the BP community:

1)How low can your returns go before you just withdraw from the market or seek other avenues for returns?

2)Is your market at that point already and what are you doing about it?

3)Do you think the sudden availability of more abundant funding will make still investing a good idea because you can capture the spread between the funding rate and the (much lower) return like many funds are doing now?

4) To what extend have you started to focus more on the risk mitigation side of things than return?

As an example if you can do it a spread of 5% to 6% is very healthy and can probably be achieved in today’s rate environment but it implies a return of only 10% to 11% which is not bad but may not compensate for the inherent risk.