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Black River spawns new EM credit boutique
(pictured: Dan Chapman)
Argentem Creek Partners, the emerging markets credit business formerly part of Black River Asset Management, has been hived off as a separate employee-owned firm, focusing on opportunities for institutional investors.
Daniel Chapman, who led the EM team at Black River and is an emerging markets distressed debt specialist, is CEO and CIO for the business, which is headquartered in New York but has offices in London and Minneapolis. Charles Friedberg is president and COO and Angela Gorder is global head of business development.
The EM team is fairly well known in Australia and has a healthy pipeline of potential Australian investors. It had previously been marketed by James Gruver, a former Black River executive who was the chief executive of BNY Mellon Asset Management in Australia from 2003-2009 before being promoted to a senior position with that firm in New York. He left to join Black River in Minneapolis in 2013 and, from last month, has become a managing director of property manager Heitman in Chicago.
Argentem Creek launched with a global staff of 14 people across fully functional investment and administration teams. Upon completion of the spinoff, Argentem Creek retained all its investors, now managing about US$500 million in assets. Cargill, the parent company of Black River, will continue to be an investor in one of the funds. Other investors include two of the largest alternative asset managers in the world and a sizable, external single-family office.
Gorder said last week: “We are grateful for the continued commitment and support from our investors. We look forward to partnering with them as we strive to create a firm with a unique investment offering coupled with exceptional client service.”
Argentem Creek plans to raise additional capital in 2016. The firm estimates the total current capacity of its emerging market distressed debt and special situations strategy is about US$1 billion.
“Emerging markets corporate credit represents a large and inefficient asset class with fewer participants today than five or more years ago as banks have curtailed their proprietary trading desk activities and, as a result, we have observed that market liquidity has diminished materially,” Chapman said. The asset class has grown to US$1.6 trillion with a 20 per cent compound annual growth rate over the last decade across more than 30 countries with different laws, regulatory environments and disclosures.
The ‘Argentem’ – pronounced “är′ jÉ™nt-um” – name was inspired by a place where Chapman spent time as a youth. A Portuguese word, it also reflects his family’s history.
Cargill and Black River announced in September last year that three of its asset management businesses were pursuing plans to spin off into independent firms. The Black River board said it believed employee-owned firms would create better alignment and position each team to best serve investors, including Cargill.
The emerging markets credit business, now Argentem Creek, is one of the three. Chapman said: “Cargill was an excellent parent and the Black River board encouraged the team to create an employee-owned organization. We are thankful for their support.”
The other two spin-offs are a fixed income relative value business and a private equity team.
