Polus Capital Secures ADIA Funding

Polus Capital Management, the London-based leading investment management firm specialising in alternative credit strategies, on Wednesday announced that it has secured a capital commitment for its Special Situations strategy from a wholly owned subsidiary of Abu Dhabi Investment Authority (ADIA).

Following the commitment, Polus’ Special Situations strategy has approximately $5 billion of assets under management. Besides London, Polus Capital also has an office in New York and its assets under management are around $11 billion.

The company invests across the capital structure and liquidity spectrum, focusing on three complementary strategies: Leveraged Credit, Special Situations and Structured Credit.

Polus’ Special Situations strategy focuses primarily on secondary investments in bonds and loans as part of opportunistic, stressed or distressed situations arising from idiosyncratic or cyclically driven dislocations to corporate enterprise values or hard asset values.

Polus’ Special Situations team has been working together for over ten years, during which time it has developed a differentiated and proven track record.

ADIA’s investment is a strong endorsement of the high quality and attractive characteristics of Polus’ Special Situations strategy and further adds to Polus’ predominantly institutional investor base which includes pension funds, insurance companies, endowments, foundations, sovereign wealth funds and family offices.

Polus Capital Management CEO Nicholas Chalmers said that ADIA’s capital commitment reflects the growing strength and success of Polus’ diversified alternative credit platform and they were looking forward to the ongoing development of their business while continuing to prioritise the delivery of compelling risk-adjusted returns as the company is navigating opportunities in credit markets throughout the cycle.

Credit Market Growing

Welcoming ADIA’s subsidiary as an investor, Robert Dafforn, Chief Investment Officer of Opportunistic Credit at Polus Capital Management, said that they were excited about the opportunity set for their Special Situations strategy. “We believe the coming years will prove especially favourable for our differentiated investment approach and rewarding for our investors,” he added.

Hamad Shahwan Aldhaheri, Executive Director of the Private Equities Department at ADIA, said that Polus has been one of the leading alternative credit managers in Europe with a large, experienced team, a differentiated strategy and a strong track record.

“We look forward to capitalising on a growing market opportunity through our capital commitment in Polus, which has built deep expertise in providing bespoke, innovative solutions in a range of situations,” he added.

According to a report in Wall Street Journal, investing in special situations was becoming popular on Wall Street, with firms like Oaktree Capital Management also raising money for the strategy recently. Polus’s strategy focuses mainly on opportunistic secondary investments in bonds and loans.

Polus was born out of credit asset manager Cairn Capital’s acquisition of distressed debt firm Bybrook Capital in 2021; the combined entities were renamed Polus. Today, it oversees $11 billion in assets overall.

With ADIA’s investment, the firm’s special-situations strategy now oversees about $5 billion in assets. That is up from $4 billion at the start of the year, according to a person familiar with the matter, the report said.