Palisade Capital Launches Convertible Arbitrage Strategy

May 25 2007 | 11:23am ET

Fort Lee, N.J.-based Palisade Capital Management is banking on the return of volatility with its latest offering. The Palisade Master Fund, a convertible arbitrage strategy, launched this month with $8.5 million in initial equity.

The firm has been managing convertible arbitrage strategies for institutional investors in managed accounts for the past two years, and now wants to open the strategies to outside capital, according to Elliot Stiefel, a director at Palisade. “We have a convertible arb. team of five plus we leverage off our equity team so we think the infrastructure is in place to grow and bring in new investors,” said Stiefel.

Stiefel is bullish on the space. “We’re expecting a record year for new issuance in the U.S. and we’ve had a record March followed by a pretty strong April.”

“The best time to get into the strategy is when the volatility is low, not high, and the volatility is extremely low right now.”

The Palisade Master Fund charges 2% for management and 20% for performance, with a $1 million minimum investment requirement.

Martin Berman, a former senior managing director at Smith Barney, founded Palisade Capital in 1995. Palisade manages some $3 billion in total assets.


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