Cohen Bros., a Philadelphia-based boutique investment bank, is preparing offering documents for an asset-backed securities hedge fund. The fund, named Brigadier because one of the founders went to the U.S. military academy West Point, trades ABS credit-default swaps and synthetic ABS CDOs.
Ralph Nacey, West Point grad, director and cio, and Eric Phillips, v.p., lead a team of four traders devoted exclusively to the fund, which has been trading about USD50 million of Cohen's own account for two months. But officials close to the fund said former Merrill Lynch credit chief Chris Ricciardi, ceo, also is involved in the day-to-day running of the fund. Ricciardi declined comment.
Brigadier is due to open its first quarterly entry to institutional investors in coming weeks and expects to have about USD400 million to USD500 million in assets under management in its first year. Morgan Stanley is the prime broker.
The firm reportedly is looking to add a head of risk management in the coming week and a risk management team as the business grows. Cohen issued about USD6.5 billion in CDOs in the first half of the year.