Grosvenor Capital Management has seeded Citadel vet Kevin Scherer's new structured fixed income fund, Continuum Investment Management, with $85 million.
Scherer formerly managed the Single Investor Fund at Citadel. Prior to that, he spent eight years at the mortgage-focused hedge fund The Midway Group, which he co-founded in 2000.
Scherer has been joined at Continuum by a team of his colleagues from Citadel including Brian McDonald, senior portfolio manager; Jimmy Rizos, CTO; Stephen Cameron, head of research. McDonald and Rizos held similar posts at Citadel, while Cameron was a quantitative mortgage strategist. Continuum's chief operating officer, Greg Scarffe, joins the firm from Credit Suisse Prime Services.
Continuum seeks to capitalize on prepayment and credit-centric market opportunities across residential mortgage-backed securities, commercial mortgage-backed securities and other asset-backed securities.
Said Scherer in a statement: "Our integrated multi-strategy platform and experienced team offers investors a single point of entry to a broad opportunity set in securitized products investing. We are excited about our strategic partnership with Grosvenor Capital Management, and look forward to producing attractive returns for our investors."
It's the third such deal Grosvenor, an alternative investment giant with over $22 billion in assets under management, has entered since launching its most recent emerging managers program in early 2012.