February 13, 2020
European credit investment firm AlbaCore Capital Group (“AlbaCore”, “the Firm”), announced the successful close of its second fund, AlbaCore Partners II ICAV (“Fund II”), which has €1.5bn1 in total AUM. The Firm also recently announced plans for a debut CLO in 2020, which is currently in the warehousing phase. AlbaCore’s total AUM now stands at €3.6bn2 across its commingled and customised vehicles. The Firm’s investor base includes pension funds, sovereign wealth funds, endowments, insurance companies, consultants and family office investors, across Europe, North America, Middle East and Asia.
AlbaCore’s strategy focuses on bespoke private credit solutions for larger European companies, with the flexibility to opportunistically invest in secondary and primary markets when relative value is attractive. AlbaCore expects Fund II to be approximately 60% deployed at the end of February, after actively buying in the Q4 2018 credit market sell-off, and more recently shifting focus to primary and private markets. AlbaCore was the sole underwriter for subordinated debt related to two UK public-to-private transactions: BCA Marketplace (LSE: BCA – delisted) and Ei Group (LSE: EIG). Fund II gross IRR for 2019 was +20.6%.3
Bill Ammons, Founding Partner and Portfolio Manager, commented, “Our investing over the past fifteen months demonstrates the value of a flexible mandate in periods of market stress and also periods of resurging positive sentiment, as we saw in the second half of 2019. We are particularly excited about the recent BCA and Stonegate’s acquisition of Ei Group deals, which exemplify AlbaCore’s ability to provide unique, sizeable capital solutions that helped unlock the deals for the sponsor, while also providing an attractive risk/return to our investors.”
AlbaCore has built a 32-person team across its London and Dublin offices, and invests in a capital structure-agnostic manner, via a combination of senior secured loans, high yield bonds, private debt, and preferred equity. AlbaCore’s focus on generating consistent risk-adjusted returns across the capital structure and liquidity spectrum has generated 870bps of gross alpha over European credit markets across its two funds since inception4.
AlbaCore champions a dynamic ESG approach which is well-integrated into the team’s investment decision making and ongoing risk monitoring. AlbaCore’s maiden CLO will also incorporate AlbaCore’s unique investment process and focus on ESG as part of its credit selection criteria.
Deborah Cohen Malka, Managing Director and Deputy Portfolio Manager, added, “ESG is a critical element of our Firm’s values and investment process. We continue to enhance the manner in which we implement ESG as part of our bottom up credit selection process. We also value our partners’ input to understand and incorporate their ESG ideas so we can continue to be a dynamic leader in credit investing and ESG related issues.”
David Allen, Founder and Chief Investment Officer, concluded: “AlbaCore is delighted and grateful for the opportunity to create new partnerships and expand upon existing relationships as we mature as a firm. We have come a long way since our founding in 2016, and we would not be where we are without our partners. Looking ahead we feel well positioned to continue to deliver strong risk-adjusted returns in 2020. We have an active private market pipeline, and dry powder to be opportunistic as markets digest the recent UK election results and navigate what could be an unpredictable year leading up to the US elections in November. We look forward to active and continued engagement with our partners in the coming year.”
About AlbaCore Capital Group
AlbaCore is a specialist European credit platform focused on European corporate credit markets. Founded in 2016, AlbaCore manages €3.6bn5 of AUM for global pension funds, insurance companies, family offices and endowments. AlbaCore takes a patient, long-term investment approach to private and opportunistic European credit markets. The credit selection process is based on fundamental research with a focus on capital preservation, ESG factors and risk-adjusted returns. Headquartered in London with an office in Dublin, AlbaCore is an organisation built on values, with a partnership approach alongside our investors and counterparties at our core.
1 AUM is calculated as the sum of the Net Asset Value, undrawn capital commitments and available debt finance for Fund II as of 31 December 2019.
2 AUM is calculated as the sum of the Net Asset Value, undrawn capital commitments and available debt finance of all vehicles managed by AlbaCore.
3 Gross Internal Rate of Return (“IRR”) is calculated using fully equalised cash flows between Fund II and an investor as if all current investors had been committed to Fund II from inception. Rate of return calculated does not include management or performance fees, which would be reflected in a net internal rate of return (that would be lower) actually received by investors. Gross IRR is net of fund level expenses (including the costs of any such subscription line facility), but gross of management fees and performance fees. Past performance is not indicative of future results, which may vary.
4 Alpha generation is based on the gross composite IRR of AlbaCore Partners I ICAV and Fund II from inception of each fund to 31 December 2019 vs the blended IRR, assuming an equal weighting, of BAML Euro High Yield Index and S&P Euro Lev Loans Index as benchmarks for the performance of relative European credit markets.
5 AUM is calculated as the sum of the Net Asset Value, undrawn capital commitments and available debt finance of all vehicles managed by AlbaCore.