JOSH FRIEDMAN

Friedman started at Goldman Sachs in mergers and acquisitions. Then he jumped to Drexel Burnham Lambert, the junk-bond factory run by Michael Milken, where he ran capital markets for high-yield and private placements in the 1980s.

When Drexel collapsed in 1990, Friedman and colleague Mitchell Julis started their own shop in Los Angeles. That became Canyon Partners.

They built it into a global credit firm focused on distressed debt, bank loans, high-yield bonds and securitized assets. By 2022 Canyon was managing about $26 billion.

In 2014 Friedman picked up an Institutional Investor Lifetime Achievement award. He remains co-chairman and co-CEO alongside Julis, a partnership that has held for over three decades.

Canyon Partners, Canyon Capital Advisors, formerly Drexel Burnham Lambert and Goldman Sachs

Friedman invests in credit, which just means lending money or buying the debt other people are dumping. His sweet spot is distressed debt, the bonds and loans of companies in or near bankruptcy.

Here is the thing. He actively likes complicated situations, because complexity scares away buyers and pushes prices down.

He wants to buy a dollar of value for fifty or sixty cents. He cares a lot about legal process, since a distressed bet only pays off if the courts and restructuring rules are predictable.

He also spreads across bank debt, high-yield bonds, convertibles and securitized assets rather than betting the firm on one idea.

The real win is Canyon itself. Friedman and Julis started from scratch in 1990, right as their old employer Drexel imploded, and built a firm that grew to roughly $25 billion in assets.

They did it by specializing in exactly the ugly, hard-to-value credit that Wall Street trained them on at Drexel. Distressed cycles like 2008 and 2020 are when a firm like Canyon earns its keep, buying beaten-down debt when everyone else is selling in a panic.

Friedman rarely airs specific losers in public, which makes any single misstep hard to pin down with confidence. The honest risk in his whole approach is timing.

Distressed investors who buy too early in a downturn can watch prices fall much further before they recover. Friedman himself has warned that a recession does not automatically hand you a tidal wave of cheap distress, and that lower-quality companies get shaken out first.

Buy before the shakeout is done and you bleed.

Friedman believes the best returns come from mess, not from clean easy trades. Change creates complexity, and complexity creates mispriced securities.

He is skeptical of labels. He has said he does not even love the term hedge fund, because it describes a fee structure, not a strategy.

He puts huge weight on the rule of law, arguing that predictable restructuring rules are what make distressed investing possible. And he wants to buy assets below their worth, then wait for the process to close the gap.

Friedman is married and keeps his family life private. He and his spouse were jointly honored with the Ellis Island Medal of Honor in 2019.

He was born in Boston in 1956 to a mechanical engineer father and a public-school-teacher mother.

This is the jaw-dropper. Friedman earned a physics degree from Harvard College in 1976, summa cum laude and Phi Beta Kappa.

Then a Marshall Scholarship took him to Oxford for a masters in politics and economics. Then he went back to Harvard for both an MBA, as a Baker Scholar, and a law degree, magna cum laude.

Four elite degrees. In finance, that kind of range is basically unheard of.