Reputation of Capital Four Management? (Input on switch to buyside)

Hi WSO

I am looking for some insight and opinions on Capital Four Management, a credit focused HF/AM based in Copenhagen, Denmark. It seems there is relatively limited information about them, but I included a recap of their strategies etc. further below for convenience.

I am considering moving to the buyside and am more interested in working with the hairy segment of the credit spectrum (and if not that then just straight equity). For reference, I have a mixed background from investment banking with experience from both M&A and credit. I got a decent impression of Capital Four from speaking to a couple of people working there and have overall heard great things about their HY fund in a European context.

My initial thinking is that the opportunistic credit strategy would be the most attractive for me, while I might be interested in the other strategies as well depending on a number of factors. However, I am slightly concerned about how my career profile potentially would be shaped depending on which strategy I joined and whether I risk being stuck in a "boring" role investing in corporate bonds/loans. 

I would especially appreciate any input on the following: 

  • What is the reputation of Capital Four in the market? Does it carry any weight in a more international context despite being located in Copenhagen (i.e. if one wanted to move to London/NY/HK or a "better" fund)
  • Opinions on their strategies (esp. opportunistic credit vs. private debt vs. HY/Sr. loans)? Including intellectual stimulation/excitement, differences in skill set developed and how it potentially would affect future opportunities
  • What is the caliber of the people working there? Does it differ significantly across their strategies?
  • Would it be realistic to move internally between the different strategies' teams? 
  • Other considerations I should have before making such a move?

Thanks in advance!


----x-----


Recap of their strategies from their website: 

High yield: Focus on liquid HY bonds, 3-5yr horizon, targets to outperform HY indices by 100-150 bps p.a. 

Senior Loans: Focus on sr. secured corporate loans and bonds, 3-5yr horizon, targets absolute return of Euribor+3% p.a.

Opportunistic Credit: "Opportunistic approach to invest in sub-IG credit with high degree of flexibility. Use of leverage and shorting", 3-5yr horizon "with opportunistic sleeve (higher turn-over)", targets absolut return of 8-12% p.a. over the credit cycle.

Private Debt: Direct lending (complementing bank financing, sr. secured and unitranche), 5-10yr horizon, targets 8-10% p.a. over the credit cycle. 

Capital Four has approx. EUR 13bn in AUM, skewed heavily towards the HY strategy. Believe they only have around EUR 0.5-1.0bn in each of the Opportunistic Credit and Private Debt strategies respectively.

 

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