Brisbane group Blue Sky Alternative Investments has gone into receivership following the breach of its $47.7 million loan facility from US-based Oaktree Capital Partners.
Oaktree has appointed receivers to the fallen group, enforcing its rights under the note facility after Blue Sky failed to reach its minimum required recurring earnings for the first quarter.
The administration is limited to the group and does not extend to its Alternative Access Fund along with its other subsidiaries.
The fund is now considering its options including a wind-down and a return of capital to shareholders.
“This appointment is necessary if Blue Sky is to maintain its investment teams, key clients and stabilise the operations and capital structure of the business,” Blue Sky told its shareholders.
The company added its administration follows “a period of significant instability and uncertainty for all stakeholders, including further commentary regarding possible class actions, turnover of senior corporate executives and departure of certain partners.
"There is considerable work to be undertaken in the immediate future.”
Blue Sky had $2.8 billion in fee earning assets under management as of 31 March, down from its half year result of $3 billion as reported at the end of December.
Blue Sky has now paused trading, but closed on Friday with its shares at 18 cents. They had once reached $14.99 in November 2017.
The company reported a $25.7 million loss for the half year, which it attributed to its business restructuring costs.
Mark Korda and Jarod Villani of advisory and investment firm KordaMentha have been appointed as receivers and managers, while Bradley Hellen and Nigel Markley of Pilot Managers will be acting as voluntary administrators.
KordaMentha partner Mark Korda said the appointment would not affect the day-to-day operating activities of the asset manager.
“Our objective during the first phase of the receivership is to stabilise the business as a strategic assessment is undertaken,” Mr Korda said.
“Existing management and key contacts for relevant stakeholders, employees and unit holders will continue to be in place as normal.
“It will allow greater flexibility for the restructure of Blue Sky and seek to ensure the future of the business as an alternative asset investment management platform.”
Oaktree had given the Brisbane-based asset manager the loan facility in September last year.
The US investment group’s managing director Byron Beath resigned as a director on the Blue Sky board as the loan breach was announced to the market.
The firm has particular expertise in managing funds in real assets (agriculture and water), private real estate (purpose-built student accommodation) and private equity (growth and venture capital).
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah spent her career working in business-to-business media, including print and online, as well as cutting her teeth on current affairs programs for community radio.
Sarah has a dual bachelor's degree in science and journalism from the University of Queensland.
You can contact her on [email protected].
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