Oceanwood Capital Management

Catalyst-led investing across the capital structure

Oceanwood has invested in Europe since 2006, and it calls itself among the oldest investment houses to have run without interruption with a pure European mandate. Its founder launched the flagship event-driven hedge fund in September of that year, after running event-driven strategies at a large US hedge fund manager for six years and holding earlier roles at investment banks. The firm works from Surrey and manages money for institutional investors such as public and corporate pension schemes, endowments, foundations, insurers and family offices.

One approach, several strategies

Rather than commit to a single style, Oceanwood moves capital between strategies as the cycle changes. It describes the aim as absolute returns through the cycle, using a fundamental approach to catalyst-driven opportunities. Value with a catalyst, stressed and distressed situations, constructive activism, merger arbitrage, and alpha shorts and hedging all form part of the toolkit. A strong focus on the balance sheet runs through all of it, looking for restructurings, refinancings and other transfers of value between stakeholders.

Equity, credit and distressed work

In equity, the team concentrates on companies and industries going through change, tries to spot mis-pricings, targets for takeover and announced mergers to arbitrage when markets expand, and aims to separate winners from losers when they contract. In credit, it looks at balance sheet restructuring, targets companies where a restructuring is close, seeks corporate bonds with a catalyst for releasing value and arbitrages the spread on announced transactions where it is attractive. Distressed work centres on value moving between creditors and shareholders, with detailed downside analysis, careful attention to position size and liquidity, and trades built to have low correlation with the wider market.

Track record through turbulence

The firm says it has managed client capital through the collapse of Lehman Brothers and the 2008 financial crisis, the European sovereign debt crisis that ended in the Greek bailouts, and more recent political upheaval, and that its flexibility let it invest across the capital structure of European companies throughout.

Responsible investing

Oceanwood says it has weighed environmental, social and governance factors from the start. It has an ESG committee of senior people from investment and non-investment areas, signed the Principles for Responsible Investment in January 2021, and is an investor signatory of the Carbon Disclosure Project. It supports Say on Climate and is carbon neutral to the British Standards Institution specification, working with a consultancy that measures its footprint and offsets emissions through projects such as a prize for zero-carbon aviation. It also publishes its commitment to the UK Stewardship Code.