Chicago Fixed-Income Specialist PTAM Launches New Hedge Fund

Jan 8 2014 | 10:29am ET

Chicago-based investment manager Performance Trust Asset Management is adding a hedged fixed-income product to its lineup.

The PTAM Dynamic Fixed Income Fund, which launched last week with roughly $60 million in commitments, will be “much more of a relative-value or hedge fund-type of mandate” than the firm's existing hedge funds, a source with knowledge of the fund told FINalternatives.

PTAM, with about $1 billion (chiefly institutional and family office money) in assets under management, currently runs about $600 million in levered and unlevered versions of its long-biased structured credit strategy: the four-year-old PTAM Enhanced Structured Credit Fund, up 7.28% year to date; and the five-year-old PTAM Structured Credit Fund, up 3.68% YTD.

The new fund aims to hedge out unwanted exposures across fixed-income and credit, said the source. Therefore, where the legacy funds might be long non-agency mortgage-backed securities, the new fund will take on that long exposure but will also short agency securities to hedge interest rate risk.

Similarly, where the legacy funds may be long municipal bonds, the new fund will also be long munis but will hedge inherent credit and interest rate risks by shorting corporates.

The fund will be overseen by PTAM's investment team which includes the firm's new CIO—Citadel vet Ethan Youderian—and CFO David Pritsker, a UBS O'Connor vet and former Magnetar CFO.

PTAM, which was founded in 2008, employs a staff of 25 and runs hedge funds, municipal bond mandates and two mutual funds.

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