Former Redwood Credit Specialist Jed Nussbaum Forming New Hedge Fund

Oct 21 2015 | 5:01pm ET

Former Redwood Capital Management partner Jed Nussbaum is forming his own credit hedge fund at his new company, appropriately named Nut Tree Capital Management, and hopes to start trading early next year. 

Nussbaum’s fund will pursue distressed credit, high-yield value and long-short equity strategies in North America, focusing on companies with a combined debt and equity valuation of $250 million to $2 billion, Nussbaum told Bloomberg in an interview. 

The approach is to look for companies facing cyclical challenges like defaulted securities, restructurings, liquidations, and other major inflection points. 

Trading is expected to begin in February 2016 with $300 million in assets under management. The fund will reportedly seek downside protection through a mix of low leverage ratios, diversification, and hedging.

The new fund has received seed funding from Bahrain’s Investcorp as part of its seeding business, and is seeking additional institutional investors. 

Prior to launching New York-based Nut Tree in June, Nussbaum was at Redwood for twelve years and a partner from 2010 until he left the $5 billion firm in February. At Redwood, he invested in credit and equity instruments of companies in a wide range of industries, and was deputy portfolio manager for Redwood’s Opportunity Fund

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