Friday, 1 August 2014
Last updated 33 min ago
Oct 27 2008 | 3:23pm ET
Alpstar, a US$2 billion European credit hedge fund manager, has opened its long-only European credit fund, Alper Credit Value Fund, to external investors.
The fund was initially seeded as a closed vehicle in early 2008, when Alpstar portfolio manager Nicolas Bravard thought that senior secured bank loans were beginning to offer significantly more value on a risk-adjusted basis than either private equity or pure distressed strategies. Such loans are senior to equity and secured by assets of the company, and pay interest.
Recent market turmoil has forced many small and medium banks, as well as some larger ones, to shed these performing assets at extremely distressed prices. “Throughout most of 2008, and, indeed, probably well into 2009, we have a rare opportunity to purchase some of the safest and most attractive assets of exceptional European companies at historically low prices,” said Bravard.
“Prices are so low that, in many cases, they assume a default rate exceeding 80%. Even in the 1930's, European defaults did not rise above 20%.”
Interest in ALPER has come from both existing hedged investors, as well as new clients looking for a medium term value investment on a lower cost basis than a traditional hedge fund. Terms include a 1% management fee and a performance fee subject to a Libor hurdle. Unlike many other credit funds, the ALPER fund does not use leverage.
Geneva-based Alpstar launched its first funds were launched in 1996.