Osprey Group Asset Management is planning to launch a distressed fund sometime in the next month. The firm, which is run by Michael Araiz and Mathew Bennett, will kick off the fund with around $25 million. It will make value investment plays across the capital structure including equity, bonds and bank debt, said Araiz.
The fund will have the advantage of being small without the burdens of having to put a lot of capital to work in the distressed area, said Araiz. He added that there should also be good opportunities to pick up some fallen angels. Earlier this year the firm tapped Steve Jackson, formerly of SAC Capital Advisors, to manage the fund.
The firm is also working on a levered version of its flagship Osprey Opportunity Fund. The fund buys at a discount mostly high-grade asset-backed securities in odd-lot portions from dealers looking to shed these positions. It then generates alpha by selling the odd-lots to smaller dealers or by collecting enough odd-lots to create round-lots for sale in that market. The new version will afford investors the opportunity to get higher returns off the low volatility strategy, said Araiz. Osprey has lined up around $200 million for the new offering and is awaiting bank approval.