Gramercy Funds Management has launched a $200 million emerging-markets distressed credit hedge fund.
The Greenwich, Conn.-based firm said the fund, the successor to its Distressed Opportunity Fund, will invest in all manner of stressed and distressed debt, as well as performing and defaulted debt, Bloomberg News reports. The new vehicle, which will invest in both corporate and sovereign debt—Gramercy is among the investors in Argentina's restructured debt—aims to profit in particular from the nearly $2 billion in emerging market debt coming due over the next four years.
The new fund debuted in June and has garnered $200 million in commitments. It will remain open to new investments through next June; Gramercy did not specify a fundraising target or capacity.
"High-yield issuers in emerging markets will experience severe liquidity challenges over the next several years as the capital markets continue to eschew riskier corporate credit and banks in the developed markets continue to reduce their lending appetite," chief investment officer Robert Koenigsberger wrote. "Investors who want to profit from the problems in Europe should look at those risk assets that have re-priced but have nothing to do with Europe."
The new fund, which is up 11% since its launch, is managed by Robert Rauch, who also manages Gramercy's first Distressed Opportunity Fund, launched three years ago. That fund has annualized returns of 14% and is currently returning capital to investors.