Investment Strategies

Our Diversified Platform

Black River provides institutional investors with an array of investment solutions.

Investment Strategies

As capital flows into alternative investments continue to grow, there is increasing interest in opportunities and differentiated performance. Black River's diversified platform of absolute return trading and private equity strategies, is built on our core competencies in fixed income and equity arbitrage, emerging markets, and commodity-related trading and investing. This provides institutional investors with highly focused investment solutions that deliver portfolio diversification and absolute returns.

Black River's absolute return trading strategies reflect our core competencies in relative value, emerging markets and commodities-related investing.

Black River's highly focused private equity strategies seek to generate attractive, risk-adjusted returns through investments in three distinct sectors: agriculture, food, and metals and mining.

Our approach leverages the full capabilities of our firm and in particular, the insights and intelligence we are afforded from our international network and access to Cargill resources. More importantly, with an emphasis on investment diligence and risk management scrutiny, we capitalize on market opportunities to address a variety of investor needs and objectives.

Absolute Return Trading Strategies

Our highly focused absolute return trading strategies are a direct reflection of our core competencies. Black River relative value strategies are built on our strong fixed income and equity capabilities; Black River emerging markets strategies benefit from our extensive worldwide footprint and decades of experience trading in developing countries; and Black River commodity-related strategies reflect our deep knowledge, and relationship to our parent, Cargill. We seek to deliver attractive risk-adjusted returns under varying market conditions by relying on experienced investment professionals, proven risk and investment management processes, and a commitment to compliance and controls.

Black River's dedicated investment professionals are supported by the firm's robust infrastructure. This includes teams of risk management, investor relations, finance and liquidity management, strategy and business development, law, tax, compliance, financial reporting and control, information technology, and human resources professionals. Cargill is one of our limited partners, demonstrating their commitment to our investment approach and the skills of our portfolio managers.

Relative Value
Black River relative value strategies seek to capture structural inefficiencies and valuation mispricings of liquid securities traded in the financial markets. Our teams have deep insight into the drivers of these global markets, as well as unique processes for synthesizing our analyses into high-conviction themes and strategies, that can be deployed rapidly to capture opportunities.

With trading offices in Minneapolis, London, Geneva, and Singapore, we have the ability to identify opportunities on a global scale. Trading strategies have been developed and honed over two decades and today are executed across multiple asset classes.

Emerging Markets
Our emerging markets approach is based on four main pillars: local markets and foreign exchange trading, sovereign fixed income trading, equities trading, and emerging market corporate credit trading. They include both directional and relative value strategies, with a strong focus on macroeconomic fundamentals and political assessments.

Black River's emerging markets network includes operations in Eastern Europe, Latin America, and Asia to source investments not only in the BRIC nations but across smaller and often more opportunistic emerging economies. Our unique local perspectives and 24-year history in trading emerging markets provides deep cultural and linguistic sensitivities and a keen understanding of the key commodity, economic and political issues that drive emerging market valuations. This is further enhanced by many of our team members who as nationals in the countries in which we invest, provide strong local market connections.

Black River's approach to the commodities markets is fundamental and based on a sophisticated understanding of supply and demand across global commodity markets. Portfolio construction blends both directional and relative value strategies, with an emphasis on delivering absolute returns combining lower volatility and beta exposure. We engage in both direct commodities investing and in equities trading of companies whose underlying businesses are impacted by the fundamental and price dynamics of the commodity markets.

Private Equity Strategies

Black River's highly focused private equity strategies seek to generate attractive, risk-adjusted returns through investments in three distinct sectors: agriculture, food, and metals and mining. Designing our strategies for long-term duration, we identify enterprises and assets that are well-positioned for growth, driven by a global trend toward increased urbanization and a growing middle class. Investment activities rely on an experienced, global investment team and a differentiated perspective on commodity supply and demand in both developed and emerging markets. Underlying these strategies is a set of risk management processes that are the cornerstone of our approach.

Our focus on the agricultural sector reflects our investment theme that relentless growth in demand for crops has caught up with the productive capacity of the world's farming sector. Based on this, we look to invest in crop production, both upgrading production on current farmlands and converting pasture land into cropland. On a historical and global basis, the farming sector has been operated on family balance sheets that do not have sufficient expansion or operating capital required to meet the world's growing demand for agricultural crops. We seek regions around the world that present the best relative values in which to invest in farming enterprises, and once identified, seek the best local operators in whom to invest growth equity for the acquisition and operation of farmland.

Black River's focus on the food sector reflects our belief that it is poised for significant growth in the emerging markets. This is based on a significant shift in dietary preferences, including greater consumption of protein, a preference for nutritious and convenient food preparations, and an increased focus on food safety standards. In particular, we focus on three primary areas of the food system value chain: protein production, value-added processing, and supply chain management. We look to make growth equity investments in forward-thinking management teams that are positioned to scale rapidly and efficiently, while implementing food safety/quality systems that will allow their companies to become future leaders.

Metals and Mining
Our focus on the metals and mining sector reflects our belief that historical underinvestment, misallocated capital, declining asset quality and a shortage of skills have each contributed to a supply response that has been unable to match the long-term demand growth for metals and minerals. We look to invest in development projects and/or operations with growth potential that have relatively low cash costs of production or the operating flexibility to provide a degree of protection from the volatility of the commodity markets. We target investment opportunities that provide exposure to select commodities which, due to structural or regional factors, have attractive fundamentals and barriers to entry. This includes bulk commodities (coal, iron ore and industrial minerals); base metals (copper, nickel and zinc); and precious metals (gold and platinum). Central to this strategy are equity investments that provide Black River with a degree of influence and allow us to support experienced, quality management teams.