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Digital Subscriptions > The Hedge Fund Journal > Issue 109 - November 2015 > Alcentra’s Credit Alternatives Vision

Alcentra’s Credit Alternatives Vision

Extraordinary European opportunities in stressed, distressed and special situations

The Alcentra Group (“Alcentra”) is one of the largest non-bank lenders to European corporates, and the only one of the top credit managers globally that is headquartered in Europe. Yet the firm’s reach is very much global, with an even split of assets and the 64 credit investment professionals (of 12 nationalities) between the US and Europe. Alcentra’s offices span London, New York, Boston, and Düsseldorf with representative offices in Singapore and Hong Kong.

Pictured David Forbes-Nixon, Chairman and Chief Executive, The Alcentra Group

THFJ visited Alcentra’s London headquarters and met several senior team members including two 2015 hires and co-founder, Chairman and Chief Executive David Forbes-Nixon, who also manages the special situations and distressed strategies.

His ambition to “create a tier one global sub-investment grade credit manager which can deliver solutions to clients across the capital structure”, has now been attained – but it has taken 15 years to get there. In 2000, Forbes-Nixon set up Barclays Capital Asset Management. In 2003, backed by private equity firm Alchemy Partners, he spun it out to create Alcentra. Starting with $2bn of assets, mainly in four Collateralised Loan Obligations (“CLOs”), and 20 staff, Alcentra now has assets of $26.8bn, across 70 funds, and 131 staff. The CLO proportion of assets is down from 85% three years ago, to below 45% today (included under Secured Loans below), but Forbes-Nixon still views CLOs as “an important foundation stone”. Growth has been almost entirely organic (bar the 2013 acquisition of Chris Barris’s top quartile High Yield business from Standish). Credit alternatives, including structured credit, direct lending, distressed debt and multi-strategy credit have provided the greatest growth – and “these will continue to be fundamental growth areas over the next 5-10 years” as investors reassess their asset allocation, expects Forbes-Nixon.

Fig.1 AUM by Strategy
Source: Alcentra

Comprehensive coverage

Alcentra’s asset breakdown appears above. It offers traditional and alternative strategies working across the whole continuum of sub-investment grade credit, which cultivates a culture that enables analysts, who average 15 years’ experience, to choose the optimal instrument to express their views and deliver the best risk-adjusted returns.

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