Dear London Colleagues,
Any thoughts on Albacore Capital? https://albacorecapital.com/team
Seems to have a good track-record, very decent AuMs, but not sure if they invest across the whole cap structure?
Anyone has any insides regarding comp at the associate level, the culture, and what kind of work you do?
Very interested.
Thank you!
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They invest across the capstack indeed, have done a lot with TDR historically including the Prefs for BCA (now Constellation Automotive), Stonegate Pubs, Algeco/modulaire and more recently some rescue type stuff on Hurtigruten. They have also done some weird trade with Mindmaze and with Babylon. All of that out of their private fund.
They also have a pool of CLOs.
My understanding from the people that I know is that as a junior you work across all pools of capital but you will cover specific sectors.
Very helpful! Thanks :)
And regarding comps and culture? I'm always confused of the upside vs downside vs a PE job. I know this is more liquid (you get yearly carry vs a PE), but I guess expected wealth generated over let's say, the next 10 years, would be higher in a PE vs this kind of places?
Also, are they a hedge fund, or more like a Long-Only fundamental AM?
Thank you!
Don’t know regarding comp / culture. People seem to stay so has to be decent. What I have been told is that when things are quiet, it’s very chilled, when its busy people grind hard.
Over 10 years - it’s all about where you will be successful and able to go to the top. I would not make a career decision based on what you think your earnings might look like. Know some guys that went to shops where they would make the most but ended up not being promoted and pushed out…
Albacore is an opportunistic credit fund, don’t think they are a hedge fund per say given that they do a lot in privates.
90% of Albacore is lending at the pref/mezzanine level for like 10%. Think about where their funds would be marked today and how much the carry you will get is worth.
To be fair, that’s what a lot of funds doing junior private credit have done in recent years - deploying at 10-12% fixed rate at the holdco level (GS PIA, Ares, Park Square, GIC, Carlyle, etc.).
Yes 100% - not just Albacore. And its a fantastic way to build a business, and David will be a billionaire once he sells this (depending on how much equity the Canadian pension fund has in the biz). Not so much an investing strategy moreso a capital deployment strategy (although I have this view of everything locked up drawdown given the levered long of it all) and it does the job the LPs wanted well. But if you're an employee being offered carry as a major part of your comp package (as it should be multiples of your cash comp over the investing and harvesting period), you want to know if it is worthless or not - at least for the vintage you are getting. If it's mainly carry in a new fund then totally fine. Also the old funds may have lots of prefs that end up paying back par who knows? Some probably will. that's the beauty of never having to mark anything to market.
Nice deal they did with Hurtigruten, 200m secured paper with E+6% cash pay and 6% PIK coupon....shakes out to a mid-teens IRR (paper issued at OID) on paper that is money good in my view. I have spoken to a few of their analysts on more performing situations and they seem like a sharp outfit. Would be a good shop to work at in my view.
Albacore got equity through warrants and a portion of the PIK notes will be equitised- maybe this is where your mid teen IRR is coming from otherwise I don’t follow (how big of an OID are we talking here)
E+6% cash gives you 9-10% cash when you include EURIBOR and 6% PIK solves into 15-16% IRR excluding any OID / call pro. Warrants probably blend to high teens/low 20’s if I had to guess?.
I think you are money good as long as you can follow your money given the pile of debt maturing ahead of you. Not necessarily a smooth & easy ride.
I was chatting with a friend about the trade, I think that it might also be a self help trade given that their paper done in 2020 (which albacore was big in as I understand) had upcoming maturities.
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