At AlphaSights, we have unique range of clients, from Corporate Strategists to Fund Managers. My team is part of the Capital Markets (CAP) segment in London and we work specifically alongside hedge fund and credit fund clients. What marks out hedge fund investors is that they have a broad investment mandate and employ leverage to maximise their returns. Interestingly, distress investors, sometimes called ‘special situation’ funds, focus on investing in securities & companies experiencing financial or operational distress, default or bankruptcy. Similar to all our clients, we help them access highly relevant knowledge, on demand, but there are some nuances which make serving Capital Markets clients unique.
Credit funds have a flexible investment mandate which allows them to act quickly and invest in a wide range of geographies and sectors. This means that in the past few months alone we have looked into many different industries, from US coal mining and Nordic shipping to insurance brokerage and European casinos.
Our clients also look at a wide range of credit instruments, from direct lending to CLOs (Collateralized Loan Obligations) and high yield bonds in the secondary market. Understanding these different types of deals allows me to provide our credit clients with a proactive service, but also allows me to establish AlphaSights as a partner rather than just a reactive service provider. I regularly have conversations with my clients about market trends and deals they have recently closed. Building these kinds of trusted relationships with demanding investors is a challenge but ensures our clients know we can help them throughout the investment cycle.
It’s great to see how our service is leveraged throughout the investment cycle. From the outset, we can introduce senior industry figures to our clients who may present investment opportunities. The majority of our work takes place during the due diligence phase, when funds need to sharpen their understanding of a specific investment target and the industry this company operates within. Also, when a client already has an active stake in a portfolio company, they need to decide on how their investment should evolve (hold, increase share or divest). At this stage, our clients seek knowledge about best practices in the market as well as regulatory, technological and commercial trends that could significantly impact the sector.
Given the variety and complexity of investments and deal structures we work on, coupled with daily developments in capital markets and business news, working in the CAP team keeps us on our toes. With the solid current environment for distressed opportunities and expectations of restructuring increasing, 2015 will be an exciting year for our team, and I am thrilled to be part of the adventure.