Capital Allocators · Monday, September 28, 2026
Nancy Zimmerman, co-founder of Bracebridge Capital, emphasizes the crucial lessons learned from crises, highlighting the importance of liquidity and flexibility to capitalize on market dislocations. She also stresses the need for rigorous stress testing and understanding the difference between a drawdown and capital impairment.
“you learn a few things during crises. You want to have liquidity, flexibility to be able to lean into dislocations, especially things where you know them well. And you feel like you are positioned to take advantage of it, maybe make it go away.”
“Every crisis teaches and reinforces that you want to stress test. You want to think carefully about what factors could cause a drawdown in your portfolio. And you want to think harder about what's the difference between a drawdown and a capital impairment, because those are different things.”
“The most important thing that we learn is good people who are curious and have thought through things and can maintain their curiosity, their bearings and have a real sense of rigor and purpose are vital to those moments.”