Junk Bond Veterans Launch Garden State Fund

  • 10 Aug 2003
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A high-profile group of junk bond veterans has raised $100 million and will enter the market Sept. 1 with a hedge fund that will take long and short positions in high-yield bonds and leveraged loans, according to LMW sister publication Bond Week. The managing partners of the fund, called Chatham Asset Management, are Larry Buchalter and Anthony Melchiorre. They both declined comment when reached at their Chatham, N.J., offices.

Unlike many recent credit hedge funds, Chatham will not invest in the distressed market, where shorting strategies are used more frequently than in mainstream high-yield. Chatham hopes to benefit from a high-yield market driven largely by technical factors such as issuance levels and fund flows. It believes its strategy will support a fund of up to $500 million.

Buchalter, Chatham's president, was ceo of BondBook, the short-lived online trading platform that closed in late 2001. He also held a number of investment-grade and high-yield posts at Goldman Sachs and served a stint overseeing the firm's new issue business. He left Goldman as a partner in 2001. Melchiorre, who will be the portfolio manager, was released from Morgan Stanley as part of cutbacks late last year. At the time, he was managing director and head high-yield trader.

Chatham has recruited two senior analysts--Drew Hanson, who ran the telecommunications and technology research group at Morgan Stanley before being let go with Melchiorre, and Tom Reedy, a former portfolio manager at OppenheimerFunds. Chatham is looking for two or three additional experienced analysts.

  • 10 Aug 2003

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Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Citi 7,171 21 10.72
2 Bank of America Merrill Lynch (BAML) 6,901 20 10.32
3 JP Morgan 4,776 10 7.14
4 Credit Suisse 4,718 9 7.05
5 Lloyds Bank 4,420 14 6.61

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Rank Lead Manager Amount $m No of issues Share %
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1 Wells Fargo Securities 68,611.22 170 11.38%
2 Bank of America Merrill Lynch 59,056.08 169 9.80%
3 JPMorgan 56,861.85 163 9.43%
4 Citi 56,521.05 165 9.38%
5 Credit Suisse 44,888.95 123 7.45%