2023-10-17 03:03:33
Beny Podlubny, the former head of private at XP, is opening a new asset management company special situations with executives with extensive experience in company restructuring.
BlueOak will have as partners Meton Morais, who spent the last five years managing an investment fund special sits from Starboard, and João Junqueira, who worked for 14 years at GP Investimentos, where he was the CFO and manager of some private equity funds. The fourth partner is Paulo Barroso, a lawyer with a 20-year career at firms such as Campos Mello Advogados and BFBM.
The new manager has already done the first closing of its first fund – raising R$250 million from friends & familyformer clients and a few institutional investors – and still intends to distribute the product on a retail platform to reach R$500 million under management.
The idea, however, is to invest 3x more than that over the next six years. BlueOak intends to call on its LPs to co-invest whenever the fund sees an opportunity.
The creation of the manager takes place in an environment of rising interest rates, falling stock markets and a shortage of capital for companies in difficulty – a fertile environment for special sits – but also at a time when more and more houses are trying to explore this niche.
“It’s a countercyclical thesis,” Beny told Brazil Journal. “Historically, these moments of crisis are the ones that generate the best opportunities.”
BlueOak has not yet made any investments, but has analyzed more than 150 opportunities in recent months. The manager has 15 transactions in pipeline, totaling around R$2 billion. The expectation is to close at least one transaction in the next three months.
Meton said that BlueOak will only invest in companies, directly entering the equity or with structured debt.
“We are capital providers for companies that need debt or equity and are constrained by a financial, macroeconomic or societal issue,” he said. “We are not going to issue court orders, legal claims, or buy credit portfolios to collect later, as many special sits managers do.”
According to him, BlueOak has already separated ten main theses for investing, from sectoral to specific cases. One of them is what the manager calls ‘corporate orphans’: companies that operate in Brazil but whose owner is an international company that is experiencing difficulties or seeking to divest its assets in the country.
“This allows us to buy good assets at cheap prices,” said João. “We already have four opportunities with these characteristics in the pipeline.”
The bulk of the manager’s capital, however, must be directed to companies with good fundamentals but that are experiencing difficulties due to Selic — a situation that has become increasingly recurrent.
“We look for situations in which our capital resolves the situation at the start. Therefore, the holding period of assets is shorter than the default. This fund will only have three years to invest and three to divest,” said João.
BlueOak wants to write checks worth between R$100 million and R$200 million, and will focus mainly on the infrastructure sectors, utilities, commodities, services and consumer goods. In these sectors, the idea is to bet on companies that have revenue and cash flow stability.
“We have been looking a lot at retail, because there are many assets with problems today, but we have difficulty making a transaction. We kill most of the deals because it is difficult to find an asset with the characteristics we are looking for,” said Meton.
Beny said that, despite operating with special sits, BlueOak’s fund has less risk than other alternative products. “These are short cycles with high returns. And we worked hard before investing the capital to solve the problem.”
O target of the fund is to deliver IPCA + 30% per year.
O track record of Meton plays in favor. Starboard Special Situations I, which he managed in recent years, returned 3x the capital invested. The fund has invested in companies such as Gemini, an operator of power transmission lines, and 3R Petroleum.
Pedro Arbex
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