Caxton Associates, led by Bruce Kovner, one of the original hedge fund stars of the 1980s, is joining the parade into high-yield debt.
The firm has entered into a joint venture to form Lucidus Capital Partners, which has raised about $500 million for a high-yield debt hedge fund, Bloomberg reports.
A $500 million sum would be the most raised for a new hedge fund managed from London this year and would tie the top total for all of Europe, according to EuroHedge.
Darryl Green, head of Caxton’s Europe Asset Management division in London, will co-manage the fund with Geoffrey Sherry, a Caxton portfolio manager in New York.
Caxton’s share in Lucidus will total 25 percent. The rest of the equity belongs to Green, Sherry and other staff members. Lucidus will use Caxton’s operations to lure institutional investors afraid of committing funds to a start-up.
Lucidus sees plenty of investment opportunities in the wake of the financial crisis.
“The volatility we saw in markets last year is here to stay and will be a permanent feature of the landscape,” Christon Burrows, co-chief executive officer of Lucidus, told Bloomberg.
“We’ve shown we can make money in volatile markets.”
Investors around the world are taking on more risk in search of higher returns. Barry Sternlicht of Starwood Capital likes commercial real estate.
“All the capital is headed away from the property class. Everyone hates it. That’s usually the best time to find bargains,” he told CNBC.
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