Par IV Capital Management, a hedge fund started in part by a former head of high-yield bond sales at Lehman Brothers, is said to be looking to buy distressed high-yield bonds and bank debt. Bob Burke, who previously was the global head of sales of high-yield bonds, leveraged loans and distressed distribution at Lehman, is among the principals of the Woodcliff Lake, N.J. firm, and will co-manage the portfolio. One banker familiar with Par IV's plans says it has shown interest in acquiring some stressed and distressed bank loans; another official, however, says the money manger is still in the marketing phase and is not yet looking closely at assets.
Michael Bailey, who previously was a principal at ORIX Merchant Banking, co-manages the investment side. Burke did not return calls for comment and Bailey could not be reached. Burke left Lehman earlier this year (BW, 5/12) for reasons that remain unclear. One sell-sider notes his departure is typical of the "brain drain" taking place from investment banks to hedge funds. "There is tremendous opportunity out there," he says.
Other sell-side officials attribute Burke's departure to a reorganization that left Lehman's sales team lower down the pecking order than the origination team. "The corporate guys won the fight and demoted the sales guys," notes one observer. Burke had worked for Tom Bernard, who was head of high-yield bond sales and trading before resigning his post earlier this year, reportedly to spend more time with his family. Bernard is now chairman of Lehman's credit committee and Tom Humphrey is now head of credit sales. Kerrie Cohen, a Lehman spokeswoman, declined to comment.