Distressed Titans Continue Hedge Fund Proliferation
Senior distressed pros at hedge fund titans D.E. Shaw & Co. and Satellite Asset Management are forming their own shops, according to Alternative Investment News, an LMW sister publication.
Senior distressed pros at hedge fund titans D.E.Shaw & Co. and Satellite Asset Management are forming their own shops, according to Alternative Investment News, an LMW sister publication. D.E. Shaw's Max Holmes has set up Plainfield Asset Management to focus on special situations including event driven and distressed.
Meanwhile, Satellite's David Ford has teamed up with David Sabath, who was head of credit proprietary trading for North America at J.P. Morgan, and Steve Blauner, an ex-bankruptcy partner in the financial restructuring group at Milbank,Tweed,Hadley & McCloy, to launch a broad-based credit fund focused on event-driven situations. This will be pitched to high-net-worth and institutional investors and is expected to have a capacity of $500 million. Blauner declined comment.
Ford arrived at Satellite in 2002, having previously worked for Och-Ziff Capital Management. According to one sell-sider on a distressed desk, Sabath is a top-notch credit player. Prior to working within J.P. Morgan's prop group, where he gained a track record, he was at Goldman Sachs within the loan group, the banker said. At Goldman he managed the distressed research effort.
Holmes joined D.E. Shaw in 2002, after spending some time as co-head of the high-yield group at RBC Dominion Securities. He was charged with creating the firm's distressed group along with Daniel Posner, who came on board from Intermarket Corp. Holmes and Posner oversaw a team of roughly 25 people and managed $2.6 billion in distressed securities. Posner, now the sole-head of the group, focused on secondary trading, while Holmes was more involved in the distressed group's active positions. One of his more high-profile deals was D.E. Shaw's purchase of venerable New York toy store FAO Schwartz, which was in bankruptcy.
A D.E. Shaw official declined to comment, and Holmes did not respond to inquires. Georges Holzberger, head of marketing and investor relations at Plainfield, declined to comment. A Satellite official said Ford, who was a senior member of the distressed team, is on gardening leave through the end of May and is still acting in a consulting capacity. Satellite does not have plans to replace him, the official added.