ASX-listed fundie enters US market with strategic acquisition
MA Financial has announced that it has acquired US-based credit asset management firm Blue Elephant Capital Management.
In a trading update, MA Financial said the transaction would expand its credit investment platform into the US, while offering its Australian and international clients access to alternative investment across the globe.
Blue Elephant Capital Management was established in 2013 and managed US$184 million ($275 million) of private credit investments across a range of specialty finance verticals, including direct loans, asset backed lending and receivables financing.
The New York-based credit manager had deployed US$500 million in US specialty lending since inception, while its core fund has outperformed high-yield credit benchmarks by 2.3x since inception, MA Financial said in a statement.
The team at Blue Elephant were introduced to MA Financial in early 2021 by senior management at NYSE-listed Moelis & Company. Since then, Blue Elephant and MA Financial had worked together to evaluate and co-invest in US specialty credit through a loan funding partnership.
MA Financial, which was backed by Moelis, said the acquisition of Blue Elephant provided MA Financial with a platform for growth in global credit markets, focused on the approximately US$5 trillion of addressable opportunities in the US alternative and specialty finance segment.
“The Blue Elephant platform represents a strategically valuable launching pad for MA Financial to build significant scale in the world’s largest and deepest credit market,” MA Financial joint-CEO, Chris Wyke, said.
“There is substantial cultural alignment and shared investment philosophies between the MA Financial and Blue Elephant credit investing teams, which has been validated over the past two years co-investing together,” he said.
Specialty finance had been a core investment strategy within MA Financial’s credit fund suite, which now exceeded $2.5 billion AUM. The acquisition was consistent with MA Financial’s focus on markets where it had established expertise and a clear strategic advantage.
MA Financial would also seek to establish expanded fund distribution capabilities in the US.
Blue Elephant’s founders J.P. Marra and Ashees Jain would assume the roles of co-head of MA Financial US Credit Investments, while senior executive Kent MacWilliams would become head of MA Financial US Specialty Finance, collectively leading MA Financial’s efforts in credit investing in the US.
“We are very excited to be joining the MA Financial team and are committed to a long term growth journey with the business,” J.P. Marra said.
“Having successfully invested together for some time, we are confident that the combined capabilities and complementary styles of our respective teams will enable us to capitalise on the favourable thematics for credit investing in the US. These tailwinds are only improved as a result of recent market developments.”
Following the acquisition, MA Financial would launch the MA Global Private Credit fund. The fund would provide the firm’s domestic and international clients access to proprietary, specialist lending opportunities in the US credit markets.
The fund would be managed by the combined MA Financial and Blue Elephant investment teams. It would focus on specialty finance, asset backed lending, corporate debt and capital solutions investments, leveraging the combined loan origination, underwriting and portfolio management capabilities of both platforms.
MA Financial estimated investments of this nature had the potential to offer risk-adjusted returns of 8-10 per cent at the asset level.
Wyke said the MA Global Private Credit fund would provide its Australian and offshore investor base with access to investment strategies focused on specialist, proprietary lending opportunities in the US credit markets.
The MA Global Private Credit fund was expected to launch in June 2023 and be available to domestic and international wholesale investors from 1 July 2023.
MA Financial Group was a diversified financial services firm specialising in managing alternative assets, lending, corporate advisory and equities, with a strong focus on growth and innovation.
The firm had $8 billion in assets under management as at February 2023 and was established as a joint venture with NYSE-listed Moelis & Company. MA Financial employed over 600 people in Australia, China, Hong Kong and Singapore.
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