In early May 2018, Element ASA (Element) secured a four-year commitment from Alpha Blue Ocean (ABO) for a convertible note facility to the tune of MNOK 500. The deal was facilitated through the signing of a Letter of Intent (LOI) between the two entities, with the funding facility coming into effect once certain conditions gained shareholders’ approval. The financing is also renewable for the same amount at Element’s discretion, pending shareholders’ approval and full use of the financing. [1:parag1]
The signing of the LOI signifies the increased role of ABO as a key financing partner to Element. The terms of the convertible note facility have been structured to favour Element, with the latter seeing this as a flexible instrument that is designed to adapt to Element’s desire to invest in other entities (Ambershaw and OMM).
The use of convertible note financing facilities comes with a raft of unique characteristics. For starters, the investor in such an arrangement makes an irrevocable commitment that will not be swayed by any future changes in market conditions, with the terms of the deal typically lasting between two and five years. The commitment is implemented in tranches that are disbursed over a duration or in accordance to a pre-defined calendar. For example, a deal can involve five tranches of £2 million for a £10 million commitment.
In such arrangements, the investee (in this case, Element) controls how the tranches are disbursed, while the investor has control over the conversion of the bonds into equity, which is a key requirement in such an arrangement.
A Unique Financing Partner
Providing much-needed capital injection into early-stage private and public businesses is what Alpha Blue Ocean was established to accomplish. Since its establishment, the firm has been involved in 16 deals with more than 30 worldwide collaborators, securing commitments of 600 million euros. The average commitment size from its partnerships is 20 million euros, with some of the sectors ABO has targeted including energy, healthcare and technology.
ABO places emphasis on employing a holistic tactical approach to its investments primarily through the use of an artificial neural network model known as “Darwin IQ.” The model draws on real-time data mining and deep learning to identify the qualitative and quantitative parameters of an investment, then continually adjusts and refines the investment strategy to take into consideration any changes to these parameters.
At the helm of Alpha Blue Ocean is Pierre Vannineuse, the Founding Partner and Chief Executive Officer (CEO) who leads the investment strategy and is the face of the company. He is the brains behind the firm’s innovative financing philosophy, having drawn from a career of implementing direct and optional commitments for international projects and businesses. [3:parag1-3]
Before starting ABO, Mr. Vannineuse led Bracknor Investment Group, a family-office that was located in Dubai in the United Arab Emirates. As the Founder and CEO, he oversaw the deployment of over 400 million euros in cross-border and international transactions over a period of two years. It was through this experience that he took the step of establishing Alpha Blue Ocean.
Early in his career, Mr. Vannineuse worked for ENGIE (ex-GDF SUEZ) in France as a financial advisor for Mergers and Acquisitions. In this role, he helped close over 12 wind project finance deals while also playing a role in legal tenders for energy production assets. He has also worked as an investment professional for an alternative investment firm in London, where he got involved in all transactional aspects of the investment deals.
Pierre Vanninuese is multilingual (he is fluent in English, French and German) and holds two degrees from NEOMA Business School in France.