London, United Kingdom:
European credit specialist AlbaCore Capital Group (“AlbaCore”) announces the final close of AlbaCore Investment Opportunities L.P. (“AIO”). AlbaCore secured over $1bn of commitments for the dislocation strategy, both in comingled and SMA format, which started investing at the depth of the crisis in mid-March. AlbaCore’s dislocation investing generated a 55% IRR1 since launch to the end of November 2020, whilst benchmark credit indices saw low single digits with year to date returns of 1.7%2. AlbaCore has generated positive returns across all strategies to date in 2020.
AlbaCore launched the dislocation strategy to engage with the opportunity in what it viewed as a credit picker’s market. The team maintained their fundamental approach and were focused on companies that they have tracked for years. Many companies which have consistently been regarded as strong credits through the end of 2019, had yet to present a double digit total return opportunity. During the 2020 dislocation, these credits came into AlbaCore’s relevant price target range, whilst maintaining their strong fundamentals. With the deep knowledge and credit underwrite in place, the team was poised to capture the opportunity.
Bill Ammons, Founding Partner and Portfolio Manager Officer at AlbaCore Capital Group, commented:
“We were in a unique position to move quickly and yet maintain AlbaCore’s disciplined process and depth of credit analysis. The team’s persistent fundamental credit research combined with our 2019 CLO warehouse launch generated an extensive watch-list that covered a significant portion of the European universe. When the price was right, we were ready.”
The launch of a dedicated dislocation strategy can be seen to consolidate AlbaCore’s position as one of the leading European specialist credit managers. AlbaCore is proud to have extended its global investor relationships, despite the challenges of a global pandemic, and extends thanks also to existing investors who continue to be valued partners.
David Allen, Founder and Chief Investment Officer at AlbaCore Capital Group, commented:
“This year has required an agile approach to investing and a razor sharp focus on risk and relative value. At AlbaCore, we have navigated the 2020 market by activating our dislocation strategy, maintaining hands-on management of our AlbaCore Partners flagship funds and significantly increasing our investments in senior secured opportunities across our strategies. We are delighted to continue to expand our product offering for our partners in a thoughtful and opportunistic way. We look forward to continuing to deliver for our investors across the credit spectrum.”
AlbaCore’s Product Strategies:
AlbaCore Partners: Both of the flagship Partners funds, which have a hybrid strategy investing in private and public credit, actively drew capital to 85% in March 2020. The funds have invested $10.4bn3 and achieved 11%4 returns since inception with significant alpha capture of +700bpswhen compared to relative benchmarks5.
Private Credit Investing: Whilst liquid market opportunities are in focus this year, AlbaCore has continued to structure a number of large, off-market, bespoke private transactions, committing $2.4bn6 of capital alongside co-investors. With this year’s activity, AlbaCore has now offered over $3.5bn7 in co-investments since inception – a core part of the AlbaCore offering.
Liquid Credit Investing: The AlbaCore team has invested over €8.7bn8 in liquid investments across strategies since inception, delivering a 10.9%9 IRR. To capitalize on this year’s market volatility and the team’s expertise, AlbaCore saw significant activity in liquid markets across the platform. This part of the AlbaCore strategy provides greater flexibility for investors and can be maneuvered to focus on specific areas of the seniority spectrum.
CLO strategy: AlbaCore priced its maiden Collateralized Loan Obligation (“CLO”) in June 2020, achieving the tightest AAA spread for a European CLO following the pandemic at time of launch10. AlbaCore combined a negative ESG screening criteria and risk focused ESG investment considerations with its agile fundamental research approach. This outcome as a first-time issuer is a testament to the broader markets’ understanding of the quality of the team and investment process at AlbaCore.
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