Silver Point Capital, a diversified U.S. credit hedge fund founded by ex-Goldman Sachs debt traders Robert O'Shea and Edward Mulé in 2002, is in the process of setting up an office in London. James Karp, previously a managing director at Goldman, is spearheading the effort, and has recently been joined by Terry Hughes, partner and senior banker in leveraged finance at Goldman in London, who left the investment bank in January. The fund is not yet registered with the U.K.'s Financial Services Authority. Karp referred further questions to Adam Weiner, spokesman, who said it is too soon in the process to discuss Silver Point's plans in Europe.
Hedge funds have become an increasingly important part of the European high-yield bond market over the past year or so, and represent a larger proportion of the market in Europe than they do in the U.S., said Jim Amine, head of European leveraged finance at Credit Suisse First Boston in London. He pointed out that the European leveraged finance markets are a high-growth area with lots of opportunities, and estimated that 25-30% of demand on high-yield deals in Europe comes from hedge funds, versus 5-10% in the U.S.