Two bond market veterans have founded Hilltown Capital Management and are set to launch a relative-value credit fund. Umesh Patel, who was formerly a partner and senior portfolio manager at Seneca Capital Management, and Zachary Harrison, a director in fixed income sales at Credit Suisse First Boston, are slated to launch the Hilltown Capital Credit Fund this month. Harrison, reached at the firm's San Francisco office, declined to comment.
The fund will make trades primarily on issue-specific ideas based on research, according to a CSFB prime brokerage document obtained by Alternative Investment News, a CIN sister publication. It will also make sector-driven trades in individual credits and sector baskets as well as some opportunistic short-term investments, the document says. Each position will have a stop-loss provision of 1% of capital to limit risk.
At Seneca, Patel managed $4 billion in fixed-income portfolios and $1 billion in collateralized debt obligations. Prior to Seneca he managed global bond portfolios at Mercury Asset Management in London. Harrison, who spent 10 years at CSFB, was previously a v.p. in fixed income at PaineWebber and Kidder, Peabody & Co.
The fund will have a $5 million investment minimum with a 1.5% management fee and a 20% performance fee. It will be domiciled in the Cayman Islands and have a one-year lockup provision.
