MayerCap Preps Levered Direct-Lending Fund Of Funds

Sep 14 2007 | 11:07am ET

Fund of hedge fund manager MayerCap is prepping a levered version of its Financing Fund, which employs a direct-lending strategy.

The $15 million Financing Fund employs managers providing direct lending to private, as well as publicly listed small- and micro-cap companies. It includes between 10 and 15 managers, diversified by strategy and geography. The 1x levered fund, which is expected to debut on Oct. 1 with $10 million in initial assets, will eventually include 12 to 15 underlying managers, including those in the unlevered fund.

According to portfolio manager Alex Boguslavsky, client demand was the driving force behind the decision to introduce a levered product, which will charge 1.25% for management and 10% for performance.

New York-based MayerCap launched the Financing Fund three years ago, but only began a marketing effort this year. It has returned in excess of 12% annualized, according to Boguslavsky, and is up 7% in 2007 through August.

In addition to the Financing Fund, MayerCap manages two other hedge fund products: the Diversified Strategy Fund, which is run on behalf of Comerica Bank but is open to outside investors, and the High Alpha Fund.

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