Monday, 22 September 2014
Last updated 1 hour ago
Nov 28 2007 | 12:00pm ET
After his residential real estate and commercial real estate hedge funds gained whopping 1,000% and 80%, respectively this year (see previous story), Andrew Lahde is launching a new hedge fund to further capitalize on the credit crunch.
The new vehicle, the Short Credit Fund, will invest primarily in credit default swaps on various asset-backed securities or the indices that reference these securities, according to fund documents obtained by FINalternatives. The fund, to be launched by Lahde Capital Management next month, will also enter into credit default swaps referencing money center banks and broker-dealers.
The fund plans to short debt-related instrument via CDSs including the CMBX indices, the CDX indices, the LCDX indices and securitizations backed by automobile and credit card debt. It will provide limited protection from capital losses by investing nearly all of its assets in U.S. Treasury Bills and money market accounts, which will also act as the collateral required to enter into CDSs.
“Eighteen months ago, the general partner correctly predicted that the subprime mortgage market would suffer great losses resulting in an unprecedented credit contraction,” according to a presentation by the firm. “Since 2006, the general partner has also predicted the spread of the subprime mortgage market problems to the debt and equity markets, and the increase in risk premiums for all types of debt due to, among other factors, the perceived diminished credibility of the credit rating agencies. The general partner believes that risk premiums for most types of debt could continue to increase over the coming months or years.”
The minimum investment requirement for the Short Credit Fund is $1 million. It charges a 1% management fee and a 20% performance fee.
Prior to forming Lahde Capital Management in July 2006, Lahde was an analyst at Dalton Investments, a $1 billion Asia-focused hedge fund shop.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.