Investment Strategies - Offering a broad range of alternative investment opportunities
Our Platforms
We evaluate investment opportunities from multiple perspectives with the goal of producing consistent absolute returns under varying market conditions.
Equities
Commodities
Emerging Markets
Private Equity
Rates
Our Rates strategy seeks to produce consistent absolute returns with low volatility by deploying a disciplined approach to exploit relative value anomalies. The investment philosophy is to run a portfolio that in aggregate is net long liquidity, flat to long volatility, and long event risk. Products include sovereign debt (G10), supranational debt, federal agency debentures, pass-through securities semi/quasi governmental debt, futures, and options. Our focus is on macro-and micro- relative value strategies that encompass primarily arbitrage trading disciplines.
Equities
Our Equity professionals seek to capture consistent absolute returns through a range of specialized approaches. Fundamental research driven strategies combine both relative value and directional trading to capture bottom up and top down edge across multiple sectors and geographic regions. Event driven strategies include risk arbitrage, share class trading and the exploitation of holding company discounts. Our Equity business also specializes in using time series analysis and other robust modeling techniques to trade global equities using a systematic-driven quantitative approach. The Equity business interfaces with the volatility and credit teams to ensure full coverage of the capital structure.
Commodities
The objective of our investment team is to generate stable and consistent absolute returns in agricultural and energy commodities. Investment strategies fall into two broad categories: directional and relative value. Directional trades, long or short, are generally driven by fundamental views based on supply and demand model assessments that aid in identifying market prices that are inconsistent with market fundamentals. Such trades are expressed with futures, swaps, equities or options in the underlying instruments. Relative value strategies may include intra-market positions (such as curve spreads, time spreads or geographical spreads), inter-market positions between correlated markets (such as soybean vs. meal), overlay strategies between market classes (for example, equities overlay on commodity markets), or basis trades. The trading strategy mix between directional and relative value trades will entirely depend on the risk/ return characteristics of each investment.
Emerging Markets
Our emerging markets platform is based on four main pillars. Local markets and fx trading, sovereign fixed income trading, equities trading, and emerging market corporate credit trading. Black River employs a "bottom up" approach, allowing portfolio managers to use allocated capital at their discretion within defined risk limits. Black River risk professionals are located in Minneapolis, London, and Singapore as regional hub offices, with local offices in Moscow, Istanbul, Bogota, Caracas, Buenos Aires and elsewhere. Strategies are both directional and relative value, with a strong focus on macro economic fundamentals and political assessments. We independently measure and assess risk exposure across investments and down to the individual strategy level within each sub-fund, using a range of methods including VaR, stress tests, and scenario analysis. Portfolio managers and the risk group regularly review portfolio risk and investment opportunities across all sub-funds, re-allocating capital to maximize risk-adjusted returns.
Private Equity
Our private equity activities seek to successfully respond to the dynamic landscape of global equity investing. Our investment activities rely on an experienced, global investment team and a long history and understanding of commodities and related industries in emerging markets. This team deploys prudent investing approaches and risk management processes that are the cornerstone of all Black River funds. Our team leverages the Black River and Cargill platforms to not only source, assess and manage risk, but also to impact successful outcomes. We identify management teams, developers and entrepreneurs capable of capturing value in transitional environments due to macroeconomic factors, regulatory or political change, and globalization. A range of securities and structures are considered including expansion capital, recapitalizations, structured equity and credit/project finance. Primary industries of interest include food, sustainable agriculture, agriculture supply chain, renewable energy, traditional energy, natural resources, environmental sciences, infrastructure, transportation and logistics, and general industrial.