Asia Veterans Ready Credit Hedge Fund

Nov 29 2010 | 11:44am ET

Deutsche Bank's former securitized products chief will launch a hybrid hedge-private equity fund focused on Asian debt.

Northstone Peak Capital hopes to raise at least US$250 million for the new fund over the next six months, founder Gregory Park told Bloomberg News. The new firm eventually aims to raise up to US$2 billion, mostly from institutional and high-net worth investors. Northstone Peak may also seek to make co-investments with the World Bank and other major lenders.

The Hong Kong-based firm's Credit Opportunity will focus on consumer financial and other consumer-related companies, investing in convertible bonds and notes with attached warrants, among other fixed-income products, Park said.

"With the introduction of Basel III, banks will become even more selective in lending just as the region's most exciting companies demand growth capital," he told Bloomberg.

Northstone Peak will make between 20 and 25 investments and is targeting returns of between 15% and 25% annually, before fees. Three-quarters of its assets will be put into new bonds or warrant-linked bonds from cash-positive companies.

Joining Park at Northstone Peak are Peter Tsao, like Park a Deutsche Bank veteran, Carol Lee, formerly of Entropy Ventures, and Chris Werner, former northeast Asia regional head of consumer banking at Standard Chartered Bank. Werner worked with Park on the first cross-border credit-card asset-backed securities sale, by KEB Card, nine years ago.

Tsao was vice chairman of Deutsche Bank's global technology group, while Lee boasts stints at JPMorgan Chase, Merrill Lynch and Henderson Global Investors.

The new fund has a three-year lifespan, extendable to five years. Lee told Bloomberg, however, that Northstone Peak plans to begin making distributions to investors as soon as six months into each investment.

Northstone Peak charges 2% for management and 20% for performance about a 7% hurdle.

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