Crestline Launches Zombie Fund Effort

May 2 2013 | 9:41am ET

Crestline Investors is going zombie-hunting.

The hedge fund has formed a joint venture with merchant bank Kirchner Group to acquire and manage "zombie funds"— private equity funds with little hope of earning performance fees again due to portfolios full of underperforming assets. Crestline-Kirchner Private Equity Group will seek to buy interests in such funds on the secondary market.

"Limited partners are realizing that there are alternative solutions to underperforming funds, and now is the right time for us to scale up to meet rapidly increasing market demand," Crestline said.

For its part, Crestline may look to recapitalize zombie funds, among other options.

It is estimated that zombie funds make up as much as $100 billion of the $1.5 trillion private equity industry.


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of