A former head of high-yield research at Goldman Sachs and then Banc One Capital Markets is readying a credit fund for Quarry Point Partners, a Chicago buy-sider. Roger Gordon, who was once head of global high-yield research at Goldman and left to join Banc One about a year ago (BW, 12/21/03), has since left the sell-side and is now teaming up with Barry Schwartz, who was head of high-yield trading and sales at Banc One.
The duo is planning to roll out a long/short high-yield fund with a heavy capital structure arbitrage concentration in the first quarter. The Chicago firm believes that the high-yield market currently has more downside risk.
Unlike most funds, The Quarry Point Fund will invest solely in non-distressed high-yield credits. Also, it will focus on intra-credit bets by using bonds and bank debt in a strategy that allows it to hedge out most of the credit risk, Gordon added.
Quarry Point is seeking seed capital for the fund and hopes to launch with $50 million. It is being pitched to institutions and funds of funds and has a capacity of up to $1.5 billion.
