Merrill Vet Plans $1B Multi-Strat Fund Launch

Feb 6 2008 | 1:00am ET

A former high-ranking Merrill Lynch executive’s long-awaited hedge fund is set to begin trading in April with as much as $1 billion.

Diamond Lake Investment Group, founded by Dow Kim, who served as co-head of global markets and investment banking until May, has been making a good impression at investor meetings, Reuters reports.

The New York-based firm had initially expected to raise between $1.5 billion and $3 billion for the fund. When Kim—a lieutenant to former Merrill CEO Stanley O’Neal—left Merrill, the Wall Street giant indicated it would be a big investor in the new fund. But the two sides failed to come to terms, and Kim has recently downgraded expectations to between $650 million and $1 billion.

Diamond Lake has hired 14 professionals to manage various strategies for its fund. Ziff Brothers Investments veteran Warren Silver will run its equity long/short strategy. The firm has also lured Syed Adlan, formerly of Tribeca Global Management, Namuk Cho, formerly of UBS’ equity derivatives desk, and Michael Pasternack, co-founder of credit hedge fund shop Pinewood Capital.

The firm also plans to open a Singapore office prior to the fund’s launch, according to Reuters.

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