AICA Member Profile: Destra Capital Advisors

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Destra Capital Advisors LLC, is an SEC-registered investment advisory firm founded in 2008, with headquarters in Bozeman, MT. Led by a team of experienced industry executives, Destra is a boutique, family-oriented shop and majority owned by employees who are driven to deliver better wealth outcomes for independent thought leaders. Destra partners with asset managers to pick specific, often inefficient areas of the market where it can differentiate, specialize, and add value for client portfolios.

Destra advises four mutual funds: two open-ended funds, a listed closed-end fund (CEF), and the BlueBay Destra International Event-Driven Credit Fund, a continually offered interval fund. As of December 31, 2023, the firm manages $504 million of assets across its four advised funds.

Destra also serves as the secondary market servicing agent for 10, NYSE-listed CEFs. It further provides distribution services to various third-party funds and helps financial advisors achieve better wealth outcomes for their clients through various alternative strategies and services from institutional specialist managers. Unique within Destra’s thought leadership content is the Destra Credit Strategies Indicator tool, which tracks 18 credit sectors — everything from investment-grade corporate credit to municipal and structured credit — to provide analysis and a summary of credit market performance monthly.

BlueBay Destra International Event-Driven Credit Fund

Destra serves as advisor to the BlueBay Destra International Event-Driven Credit Fund, an interval fund that aims to provide long-term investors with attractive total returns, consisting of income and capital appreciation, through special situations, stressed, and distressed credit investments. The fund’s credit-related instruments include:

  • Bonds
  • Debt securities
  • Loans issued by various U.S. and non-U.S. public- or private-sector entities
  • Derivatives
  • Cash equivalents

The interval fund product, launched on May 9, 2018 (I shares), allows investors to make purchases daily at net asset value (NAV) and sell a portion of their shares back to the fund at NAV on a quarterly basis. The fund’s sub-advisor, BlueBay Asset Management, had net assets of $112 billion as of September 30, 2023.

“The BlueBay Destra Fund is a unique product. We’re not aware of any purely event-driven credit/special situations credit strategies in an interval fund wrapper in the market today. It’s a very idiosyncratic, non-correlated strategy that has had remarkable absolute and risk-adjusted performance since its inception.” – Jake Schultz, CFA®, Partner and Director, Portfolio Oversight & Analytics, Destra Capital.

Q&A with Jake Schultz

Where do you feel Destra does its best work?

Over the last few years, Destra has grown our mutual funds business, but we’ve long been recognized for our work in the closed-end space. The team has deep roots in the closed-end fund business both on the origination as well as the secondary servicing side.

Name one thing that most investment professionals regularly misunderstand.

The term, ‘yield,’ is commonly misconstrued. Whether people are talking about portfolio-level yield that the fund earns, or the distributions paid, the term is often confused as being the same thing, when in reality, they can be very different.

When and why did you decide to become a member of AICA?

Destra joined in December of 2021. We joined AICA because we had worked with AICA Chairman John Cole Scott before and were impressed with the network of asset managers that have joined AICA’s mission. We believe the Alliance is a great idea because it helps raise awareness around closed-end funds and other similar, less-understood investment vehicles.

What do you like most about the CEF industry?

It’s such a great place to look for income. There are so many different vehicles to choose from and there are a lot of great asset managers to work with. It requires some extra work to learn about closed-end funds and other hidden gems, but that’s where Destra and other AICA members come in to play.

Learn more about Destra, Jake Schultz, and the BlueBay Destra International Event-Driven Credit Fund.