Aladdin Capital Holdings is preparing to launch its first loan hedge fund. The Stamford, Conn.-based firm is planning to roll out the fund on April 1, said an official familiar with the fund. The firm is pursuing its first loan fund because the structure offers several advantages over collateralized loan obligations, he added. Aladdin officials declined to comment. Gilles Marchand is the managing director and portfolio manager for bank loans.
The new fund will focus on U.S. performing loans. It will likely afford investors quarterly liquidity, which is considerably more favorable than CLOs that can have lock-ups of up to 12 years, the official said. It will carry a management fee close to 30 basis points on assets, while CLOs typically charge 50 to 62.5 basis points on assets. The fund structure also allows for savings in legal and investment banking fees associated with CLOs.
Aladdin opened its doors four years ago and currently manages $750 million in credit hedge funds and $2 billion in collateralized debt obligations, including three CLOs. Bear Stearns underwrote the $319 million Landmark III last year (LMW, 12/2).