We’re going to dig into some relatively unpopular high-yield investments today, including one that I bought… but let’s start at the beginning, since it was researching one of my downtrodden positions that got me thinking about these high-yield and relatively safe income investments.

And the beginning is, what’s going on with DigitalBridge (DBRG)? This is the digital infrastructure asset manager that I started buying a few months ago, as it was falling, and it has continued to fall. If you don’t know the story, here’s the quick background:

DigitalBridge is an operator of digital infrastructure businesses and an asset management company that has also, over the past half-dozen years, been a big acquirer of companies in the digital infrastructure space, including Switch (formerly SWCH) and Zayo (formerly ZAYO). They have a good but volatile track record of buying up those digital assets, investing in them to expand their business, and then selling off some of those assets both to their own private digital infrastructure funds and to other investors. They were primarily an operator of digital assets a few years ago, and are morphing to use more of other peoples’ money and be more of an “asset light” manager, which should make their earnings more consistent… though they continue to have the operating expertise of managing these businesses, which include edge data centers, hyperscale data centers, cell towers, and fiber optic networks, and that expertise may make them better at both buying and improving/growing those businesses.

They are actively raising money from institutional investors in their long-term digital infrastructure funds, and they are also both making new investments and monetizing some of the assets they’ve built up over the years, which gives them a nice carried interest bump on the income statement (like a hedge fund, they collect both a management fee and a share of profits from the funds they manage). Buying this year was in part a bet that their carried interest will boost their returns and that they are hitting the point at which they can return more capital to shareholders — either indirectly, by paying down debt, or directly with share buybacks and dividends. They’ve just dipped a toe in the water, with some small buybacks and the initiation of a one-penny dividend over the last quarter or so, so that’s a continuing signal that they’re on track — though clearly it’s not definitive enough to ...