What is Fixed-Income Arbitrage?

fixed-income arbitrage


Longtime Minneapolis resident Jeffrey Steven Drobny splits his time between MN and Scottsdale, AZ. Jeff Drobny has spent his career in the financial services industry providing fixed-income investment strategies to his clients. Jeff Drobny’s two decades with Cargill taught him methods of isolating desired risks and mitigating undesired risks. One of the strategies he has employed to make a return on capital over his career is fixed-income arbitrage.

Fixed-income arbitrage relies on the concept of arbitrage or the fact that different segments of a market may value a product differently. Thus, one can buy the product where its price is lower and sell it where it is higher, thereby making a profit. In modern financial markets, arbitrage also can be the act of borrowing an asset at one rate of interest and then investing it at a higher rate of return.

Fixed-income arbitrage relies on financial instruments that guarantee a stream of income, examples of these are bonds issued by institutions, and credit default swaps. Credit default swaps are essentially insurance on a specific risk, such as the risk of a corporation defaulting. In the most common form of fixed-income arbitrage, the investor makes opposing bets on the value of a bond and the bond’s credit default swap, betting for example that the bond value is lower than market price, and credit default swap value is higher.


Getting to Know the Wine Regions of Italy



Chief investment officer and managing partner Jeffrey Steven Drobny serves the Geneva, Switzerland, and Minneapolis, MN-based global alternative investment firm Garda Capital Partners by setting the tone for its strategic direction. Jeff Drobny devoted the previous two decades of his career to overseeing fixed-income investment strategies at Cargill Inc./Black River Asset Management.

In his personal time, Jeff Drobny is an enthusiast for Italy’s history, culture, and wines. Any traveler to Italy will enjoy its rich and age-old tradition of winemaking, with a wide range of distinctive wine-producing regions. Experts have identified some 350 official varieties of Italian wines, although many believe there are actually thousands.

The country’s dozens of wine regions include Lombardy in the north, which produces chardonnay, pinot noir, and other varieties that include the high-altitude Valtellina red wines. The varieties produced in the Veneto region include merlot and the sparkling prosecco.

In the central part of the country, Tuscany offers cabernet sauvignon, the red Sangiovese (meaning “Jove’s blood”), and so many other varieties that many oenophiles consider the region a favorite. Italy’s central area is also home to Umbrian wines such as the white Trebbiano and Grechetto. Winemaking in Calabria in southern Italy is dominated by the production of white Greco and red Gaglioppo, both wines of Greek provenance.

It Takes a Village to Nurture a Child with Cancer


The medical community has made great strides in treating childhood cancers over the past few decades, in no small part thanks to the contributions of donors such as Jeff Drobny, a Minnesota and Scottsdale, AZ-based financial executive and a principal at Black River Asset Management. Jeff Drobny and other donors’ ongoing support of the work of groups such as the American Cancer Society allows for new avenues in research into multiple types of cancers.

Equally important to treating cancer – perhaps particularly in children – is the work of the entire treatment team. A typical pediatric oncology team includes not only physicians, radiologists, and surgeons, but nurses with special training, psychotherapists and occupational therapists, social workers and family educators.

Today’s hospitals and treatment centers provide staff whose sole function is to meet regularly with families to answer questions, address concerns, and offer access to emotional and spiritual care. A pediatric oncology social worker, for example, understands how to assist parents in creating and implementing plans for dealing with diagnosis, paying for treatment, and helping their child – and themselves – deal with the social and emotional issues that arise in the healthiest way over the long term.

Childhood and Adult Cancers – The Differences

 American Cancer Society pic

American Cancer Society
Image: cancer.gov

Financial professional Jeff Drobny is a dedicated supporter of a variety of social service causes that assist children and people in need. Based in Minnesota and in Scottsdale, AZ, Jeff Drobny has contributed to the American Cancer Society and to programs that fund research into cancers in children.

According to the American Cancer Society, there are important differences between cancers in adults and those that develop in children. While adult cancers may result from lifestyle choices such as sun exposure or smoking, children tend to develop cancers due to cellular changes that can take place as soon as they are born, or even before while they are still in the womb.

Leukemias are the most common cancer type seen in children, accounting for almost one-third of cases. Brain and nervous system tumors account for slightly more than one-quarter of cancers in children. Skin cancers are most commonly seen in adults, followed by lung cancers. The good news: children seem to handle chemotherapy better than adults do, although any child who has undergone cancer treatments will need careful monitoring, even if the disease remits.

Cancer Vaccines to Prevent and Treat Cancer

Cancer Vaccines pic

Cancer Vaccines
Image: cancer.org

While Jeff Steven Drobny spends most of his time at his firm Garda Capital Partners in Minneapolis, Minnesota, he also maintains a part-time residence in Scottsdale, Arizona. Jeff Drobny is a dedicated supporter of several charities in Arizona and beyond, including the American Cancer Society.

The American Cancer Society has a strong focus on cancer research, and has helped make almost every research breakthrough since 1946 possible. One area of cancer research that is getting a fair amount of attention these days is immunotherapy and cancer vaccines.

Vaccines work by introducing a innate or weakened virus or bacteria into someone’s body in order to help their immune system identify and fight against the pathogen. Some cancers are actually caused by viruses like human papillomavirus and hepatitis B, so traditional vaccines like these can prevent cancer by preventing those viruses.

Many cancers are not, however, caused by infections. Researchers still don’t know exactly how certain cancers are caused, so it would be impossible to create a preventative vaccine for every form of cancer. Vaccines can also be used treat a cancer that already exists. Cancer cells are mutated versions of healthy cells that already exist in the body, so the immune system can have a harder time identifying and fighting against them. A cancer vaccine can help teach the body what kinds of cells to destroy in order to return the body to a healthy state. Since the immune system has its own memory, the theory is that if the immune system can learn to fight a certain type of cancer, that cancer would be much less likely to recur.

The Edina Education Fund Innovation Grants

Edina Education Fund pic

Edina Education Fund
Image: edinaedfund.org

Outside of his work, Jeff Drobny is an active community member, contributing to numerous charities. Among the charities he supports is the Edina Education Fund.

The Edina Education Fund is a nonprofit dedicated to ensuring that Edina schools have the resources needed to produce an environment conducive to academic excellence. It was founded in 1995 by a group of parents who wanted to introduce computers into Edina Schools. The fund supports this aim by distributing grants for innovative new programs, to support partially funded projects, and to school districts as a whole. It also provides scholarships for exceptional public school students.

The Edina Education Fund Innovation Grants range from $1000 to $5000 and aim to support specific and new programs for children in Edina public schools. Since 1995, the fund has given out 300 of these grants. This year’s grants funded a diverse array of programs, from commissioning an authentic piece of world music for a school band from a Colombian composer to creating a virtual reality video using the latest technology and footage of the school.

The Basics of Commodities

Jeff Drobny received a bachelor’s degree in economics from Union College and an MBA from the Kellogg School of Management at Northwestern University and has been working in the financial sector for more than 20 years. Currently serving as a CIO at Black River Asset Management, Jeff Drobny expertly leverages his knowledge of commodity trading as a part of his position at the commodity-related hedge fund business.

Commodities are physical products that are traded on a qualified exchange in a similar manner to stocks. The small markets for commodity trading allow individuals to become more familiar with each commodity, making trading more profitable and effective. There are four basic sectors of commodities: grains or agricultural, which includes such items as wheat and rice; metals, including gold and silver; energy, which includes such things as crude oil; and livestock and meat.

Due to the seasonal nature of some commodities, the market is a little more predictable than the stock market. Many commodities move in predictable and relatively smooth patterns over long periods of time because they react to supply and demand along with reports about crops’ progression while in season. However, they can still be unpredictable in the short term due to how much they may be affected by sudden weather changes or events.