MKP Co-Founder Plans Closed-End Fund Business

Sep 26 2013 | 11:21am ET

After seven years, the "K" in MKP Capital Management is back.

Eric Keiter has established Shadow Tree Capital, his first investment business since leaving MKP in 2006. In the interim, he's run a company leasing vehicles to car services.

The new firm isn't exactly a hedge fund: Instead, New York-based Shadow Tree will run closed-end funds focused on non-bank financing, such as consumer debt and direct loans to small and mid-sized businesses, Hedge Fund Alert reports. Maturities would run from two months to two years.

Keiter plans to begin fundraising for the firm's first vehicle next month, hoping to attract between $15 million and $25 million by a final close in the spring. The first fund is for U.S. investors; a second fund for European investors would follow. Shadow Tree will charge a 1.25% management fee and 20% performance fee over a 6% hurdle.

Keiter is launching Shadow Tree with two partners, including one, Samuel Gradess, who works with him at New York Livery Leasing. The third partner is not named and currently works as an adviser to a large bank's hedge fund business, but will handle fundraising.


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