Astra has a structured process to evaluate and quantify the risks of every investment. It is a robust process that 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 fund performance for the past 9 years.
Creating value: availability of cheap credit has resulted in significant price inflation for safe, investment grade instruments; however, dislocations have emerged in relation to complex credit assets, which are often poorly rated. When evaluating or structuring a solution for private transactions, Astra uses a combination of investment tools to underwrite the risks, thus placing investors in an optimum position to generate excellent returns on its investments.
Investing in complexity: changes in the regulatory environment and lack of broader pricing expertise, including correlation and liquidity risks, renders complex credit undervalued. Astra’s primary strategy is to source such mispriced credit instruments and invest where other market participants do not.
Active management: at Astra, delivering performance is not just limited to making buy or sell decisions through active monitoring; Astra also actively engages with other stakeholders such as issuers, trustees and operating advisers to ensure the best possible outcome in situations where a debt restructuring or an alternative resolution becomes necessary.
Astra’s Private Credit investments targets attractive returns through investments in a wide range of bespoke asset based lending, 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.
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.
Bespoke investment opportunities: provide a targeted solution to sponsor’s need by aligning sponsor’s interest with that of credit providers.
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.
Structuring and risk management: using acquired bank expertise to devise capital efficient solutions at reduced costs and generate significant added value for investors.
Astra can work with investors to see if it can offer solutions that may fit more specific requirements they may have. Many investors are struggling to fit off-the-shelve investments in their own framework and can be much better serviced by a tailored credit investment solution. They may need to respond to a particular regulatory framework, ALM requirements, duration target or sustainability standards.
Astra can use its capital markets expertise to work with the investor and understand its needs and limitations to assess whether a tailored solution can be offered.