David Hall of the Philipp Family Office, Mark Stephens of Blackstar Capital and Morgan Metters, previously of Kimura Capital, have joined forces to create Blackstar Asset Management, a UK based investment advisor.
With Swiss family office seed capital, the firm will focus on sustainable private debt strategies such as direct loans, deal participation and niche private fund opportunities.
The new firm will benefit from the established deal origination and structuring capacity of the experienced Blackstar Trade Finance team, and the wider Blackstar Group will benefit from increased funding sources.
“We are extremely excited about this new partnership,” says David Hall, CIO of Blackstar Asset Management. “By bringing together Blackstar’s origination capabilities and global operational expertise together with our portfolio management experience, we believe we can deliver a product that will resonate with investors at a time of great interest in the private credit universe.”
“Trade finance, for example, has caught the attention of private credit investors recently because of its low levels of default, high transparency and high recovery rates as well as the positive impact it can provide to emerging market economies, but it has faced difficulties meeting the cash flow and larger capacity demands of institutional investors.”
“We have specifically structured Blackstar Asset Management to address the challenges that have arisen in the first generation of private credit funds,” says Morgan Metters, COO of Blackstar Asset Management. “From our many conversations with investors in this space, we know their concerns over origination, scale and cash drag. We can help them to solve these problems.”
Blackstar Asset Management has a unique investment approach to meet these challenges:
– A multi-strategy approach allows Blackstar to allocate funds to the assets, geographies and opportunities that offers the best risk-return characteristics.
– Direct lending and multi-manager flexibility allow swift deployment of capital, helping to minimise cash drag and maximise diversification.
– Partnership with the Blackstar Group gives depth and stability in origination and structuring.
Investors are allocating increasing amounts of capital to private credit strategies, attracted by the uncorrelated returns and the inflation hedge they provide.
From 2016-2017 there was a doubling of allocations to private credit funds, according to consultant Willis Towers Watson. This rapid growth is highly likely to continue, as a recent institutional investor survey by Preqin found that 62 per cent of respondents were looking to increase their allocations to the strategy. By 2020, the Alternative Credit Council expects there to be USD1 trillion allocated to private credit.