EUR 350 million - that is the inflow into Capital Four's Credit Opportunities Fund since its inception in January 2010, and also the level of inflow at which the Investment Team finds appropriate for recommending a soft closing of the fund.
The investment team recommends to the board a soft close of the fund for new investors by end of February. After that, the team will monitor asset levels in order to either carry on toward a hard close or to reopen the fund at sometime in the future.
Sandro Näf, who is the portfolio manager of the fund and is also the CEO of Capital Four says to AMWatch:
“Our goal is not to soft close actually. There is an advantage if you can run a credit business relatively close to capacity, because it means you are as close as you can be but not too big. You can be too big, because it makes you illiquid, but you can also be too small, so that you cannot buy into the really interesting deals. If your strategies keep you close to capacity, then you are in the sweet spot.”
In some investment companies, similar funds with similar strategies are opened when one fund is closed. That is not the policy of Capital Four.
“No, we wouldn't do that. I think investors see straight through that. We are humble about the commitments we have gotten and our first priority is to take care of the clients we have got now and not to run to the next thing,” Sandro Näf explains to AMWatch. The investor profile in the fund has a bias towards Scandinavia, but there are investors from all over the world who found their way to the danish Credit boutique. Several Swiss-based family offices and many institutional investors have also chosen to invest with Capital Four.
Hard target at EUR 500 million
The hard target of the fund is EUR 500 million, and, unless the market changes drastically, the ambition is to stick to that target. Changing targets is not an option for Capital Four without talking to a vast majority of investors first.
“We have a hard target of EUR 500 million. We have started to communicate the soft close at 300 million Euro. Usually when you a announce soft close, you have
a push of investments into the fund, and you can go quickly to EUR 350-380 million. And then you soft close at EUR 400 million — leaving the remaining capacity for the existing investors," Sandro Näf says.
The last time the Capital Four team announced a soft close in a high yield fund, some investors withdrew their money, because they realized that they could not scale their investments in that particular fund. That left space to other investors.
"Sometimes when you close, it creates room for other investors who are less dependent on being able to scale their position going forward. That’s the experience on the high yield side – but whether it will be the same here… maybe. We must observe," Sandro Näf says.
Capital Four was founded in 2007 by Sandro Näf, Torben Skødeberg and Henrik Østergaard. They came from a background in Nordea. Located in the center of Copenhagen, the company employs 44 people and manages 10 billion Euro within leverage finance.
Frontpage right now
Grant-making association Realdania has its roots in the history of Danish housing needs -- all the way back to the devastating Copenhagen Fire of 1795. But with his eye firmly fixed on today's financial market challenges, CIO Peter Johansen tells AMWatch the private philanthropic organization is now set for a big boost in its alternative assets.
Both Alecta and AMF are busy shifting assets into new investment types: Alecta has more than doubled its green bonds investments in 2017, while AMF’s CIO says her fund has been working to manage assets outside the traditional asset classes.
Over the years, Pensiondanmark has built up a large portfolio of alternatives, which in 2017 yielded a return that compares with equities. Investments in infrastructure, property and non-listed assets will help protect the savings of more than 700,000 members against future equity unrest and interest rate hikes.
Spiralling costs for government pensions, a large sector of the population with scant pension savings, particularly poor pensions among women -- and a group with no pension coverage at all. The latest OECD pension report lays bare the fact that Germany has a steep hill to climb, with pensions in need of far-reaching reforms.