New York Firm Launches Maiden Credit Hedge Fund

Feb 28 2008 | 1:00am ET

New York-based Deister Capital Management is prepping its maiden hedge fund, a credit-focused offering that it promises will be unique from other offerings in the market.

Founder Hilmar Schaumann, who is looking to exploit opportunities in individual corporate credits via credit default swaps, believes he’s catching the market and investors at the right time.

“This is the best environment for us because investors have gotten burned by long exposures through structured products, and they’re really looking for an alternative,” he said.

The Deister Capital Master Fund’s concentrated short bets will be in spill-off sectors from the recent crisis, while its long book will be very diversified, according to Shaumann, who thinks that the market-neutral fund will stand out among its long-biased peers.

“We have a unique portfolio structure that allows us to generate positive convexity in the portfolio,” Schaumann said. “We can benefit from widening spreads if there’s volatility or a sell-off in the market so we’re different from traditional credit hedge funds because historically they’ve always been long or long-biased.” 

Schaumann plans to launch the fund with an amount that is significant enough to allow it to be a major participant in the market, but declined to specify on the amount. The fund charges 2% management fee and a 20% incentive fee.

Prior to founding Deister Capital last year, Schaumann served as chief investment officer of Primus Financial Products and head of long/short credit trading at Swiss Re Financial Products.


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