Tuesday, 23 August 2016
Last updated 3 hours ago
Nov 10 2011 | 10:56am ET
A European banking analyst is set to jump into the turmoil facing financial institutions and the European debt crisis with a new hedge fund.
Joseph Dickerson has left Banco Espirito Santo. He plans to launch a financials hedge fund early next year, seeking to profit from banks' restructuring and other troubles.
The new fund "will invest across the capital structure of financials companies," Dickerson told Financial News. "Regulation and deleveraging will change the composition of banks' capital structures and require them to raise more equity. This will present arbitrage opportunities."
Dickerson said the new fund could invest up to 30% of its assets in credit, and that, in spite of regulatory hurdles including bans on shorting financial stocks in several European countries, there are enough attractive shorting opportunities in the sector.
He's also favoring exchanges and credit-card companies for long bets, noting that the former "is in a phase of global consolidation" and the latter "should continue to benefit from secular tailwinds and they don't have the same degree of credit risk as banks."
Dickerson was a senior banking analyst at Espirito Santo, joining the firm last year when it acquired Execution Noble. Dickerson formerly worked at Citadel Investment Group and Peloton Partners.
Dickerson said his new firm would have two senior investment managers and a team of traders, analysts and support staff.