D.E. Shaw Readies Europe-Focused Loan Fund

May 7 2012 | 4:07pm ET

D.E. Shaw Group is set to launch a hedge fund this summer with a focus on European loans.

The New York-based firm's Alkali Fund will debut in July. It is unclear how much D.E. Shaw has raised for the vehicle or how much it is seeking, but it will be helmed by the firm's four-year-old asset-backed securities team, which has generated $800 million in profits for a multi-strategy hedge fund.

Alkali will invest in residential mortgage-backed securities, consumer asset-backed debt, troubled loans, credit extensions and corporate credit, Bloomberg News reports. And while it will focus on Europe, the fund may also invest in the U.S. and other regions.

"We believe that a substantial portion of Alkali Fund's opportunity set will result from pressure on European banks to reduce their leverage," D.E. Shaw said in an April document. "We expect that a deleveraging in Europe will occur both actively through asset sales and passively through a reduction in origination of credit and willingness to roll over debt as it matures."

But, the firm added, the European Central Bank's new €1 trillion long-term refinancing program could limit "short-term opportunities."

In addition to the asset-backed team, the new fund will have the assistance of D.E. Shaw's corporate credit managers, and could set up joint ventures with servicers. Already, the firm has "established commercial relationships with a number of loan servicing partners, particularly in Spain and the United Kingdom."


In Depth

Will Liquid Alts’ Performance Sustain Future Asset Flows?

Aug 25 2014 | 10:34am ET

Liquid alternative investment funds saw the highest percentage of capital inflows...

Lifestyle

Hedgies, Economists and Musicians Mingle At Milkin Mixers In Hamptons

Aug 25 2014 | 6:00am ET

Leave it to Michael Milken to bring some gravitas and sweat to the Hamptons -- along...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.