Astra has a structured process to evaluate and quantify the risks of every investment. It is robust - and is a synthesis of many years' experience. Astra will monitor numerous parameters at both the portfolio and individual asset level. The divestment process will undergo the same level of scrutiny and rigour as the investment process. Astra utilises a rigorous stepwise investment process for all investment opportunities focusing on structural and collateral analysis, relative value, structuring, risk and exit. Different instruments often price risk premium differently and the arbitrage can be captured for investors.
Astra’s first fund was launched in January 2013 to invest across the asset backed securities universe with focus on synthetic commercial real estate assets. It is a dynamic credit fund capitalising on the market premium for structurally complex assets. The management team seeks to generate positive absolute returns through investments in structured credit assets in the US and Europe.
Astra carries out a rigorous credit analysis not only in structurally complex 1.0 credit issuances (pre-crisis), but also invests in 2.0 credit products (post-crisis) such as collateralised loan obligations (CLO), residential and commercial mortgage backed securities and corporate loans. Astra currently targets attractive returns through investments in relative value arbitrage opportunities in the US and Europe, with focus on corporate and mortgage backed credit securities.
Astra maintains a disciplined investment process that combines a deep fundamental credit and structural analysis with quantitative asset pricing and risk modelling. This remains a source of superior returns for the fund, exceeding 15% annualised for the past five years without the use of any leverage.
Astra’s Private Credit investments targets attractive returns through investments in a wide range of bespoke asset linked debt profiles, ranging from operating assets to commercial real estate in the US or Europe. Opportunities can both be secondary and primary in nature. For the primary investments generally directly originated, Astra has ability to offer bespoke financing solutions for borrowers with non-standard needs. High returns are typically achieved by simplifying complexities and thus increasing liquidity, be it through streamlining financing or through debt restructuring.
The key components to Astra’s Private Credit investments are:
1) Ability to create bespoke investment opportunities: provide a targeted solution to sponsor’s need by aligning sponsor’s interest with that of credit providers
2) Strong collateral analysis: albeit being “just” the lender, Astra takes an ownership perspective to evaluating the collateral. This implies that asset will be scrutinised in detail from a quality and cash flow perspective.
3) Structuring and risk management: using acquired bank expertise to devise capital efficient solutions at reduced costs and generate significant added value for investors.
Astra aims to deploy capital in efficiencies the market is currently presenting alongside leveraging on its unique direct access to capital markets. Driving its own structuring also allows Astra to set lending conditions in the form of lender protection mechanisms and operating interventions to ensure maximum returns. Investments are medium term in nature and usually have a high return on capital invested by sourcing opportunities with predictable, stable cash flows and solid collateral.
Astra offers solutions for investors who wish to gain exposure to the credit market but require their investments to be highly liquid. This can for example be achieved through a UCITS fund providing access to highly rated asset backed securities.
Regulatory environment driven supply-demand imbalances have resulted in attractive risk/reward profiles for a number of sectors such as AAA CLOs. Astra endeavours to capitalise on such inefficiencies by providing structured solutions that allow investors to realise their target returns without compromising much on liquidity.
Given the current low interest rate environment across most developed economies, Astra has devised asset liability management strategies to monetize these low rates, thus offsetting or even outweighing tight asset spreads and enhancing returns.