Morgan Stanley Said To Prep $500M Special Situations Fund

Jul 28 2017 | 7:39pm ET

Morgan Stanley is reportedly planning to raise $500 million for a new fund vehicle aimed at unconventional, illiquid assets in niche markets even many hedge fund and private equity managers find too complicated to engage. 

The famed Wall Street bank is speaking to investors about the new fund, according to Reuters article citing an unidentified document. Styled similar to a private equity pool, the new fund will be named North Haven Tactical Value and will potentially invest in such disparate assets as biotech royalties, tax receivables and dividend swaps, the article said. 

Official launch for the new fund, which will be managed by veteran Morgan Stanley executive Tom Cahill, is reportedly expected in the next few months. Morgan Stanley itself is barred by Dodd Frank regulations from contributed more than 3% of the fund’s capital.

A number of Wall Street firms, including Goldman Sachs and Blackstone, have launched similar niche special-situation vehicles, which offer very low correlations and true alternatives exposure to investors. Meanwhile, more than thirty such funds are in the marketplace at the moment, according to the Reuters article, hoping to raise some $16 billion.

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