Alpstar Management, a credit hedge fund manager based in Geneva with more than USD2bn in assets under management, has announced the opening of its long-only European credit fund, the Alper
Alpstar Management, a credit hedge fund manager based in Geneva with more than USD2bn in assets under management, has announced the opening of its long-only European credit fund, the Alper Credit Value Fund, to external investors.
The fund was initially seeded as a closed vehicle early this year, when Alpstar portfolio manager Nicolas Bravard considered 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 well-performing assets at extremely distressed prices, Alpstar says
‘Throughout most of 2008 and 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,’ Bravard says. ‘Prices are so low that in many cases they assume a default rate exceeding 80 per cent. Even in the 1930s, European defaults did not rise above 20 per cent.’
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 per cent management fee and a performance fee subject to a Libor hurdle. Unlike many other credit funds, the Alper fund does not use leverage.
Alpstar is a specialist European credit house whose first funds were launched in 1996. The investment advisor, Mignon Genève, is a Swiss-registered asset manager with offices in London and Geneva.
