Global Recovery Investments, a joint venture set up by a former Bear Stearns executive, is prepping its Global Recovery Fund, a distressed hedge fund, for launch in the third quarter with between $10 million to $20 million in assets.
The firm is JV between Vancouver, British Columbia-based Jutland Capital Management, which boasts former Bear portfolio manager Fred Jones, and Chicago-based Andes Capital Group, a minority-owned investment bank.
The fund has identified investment opportunities in several distressed sovereign loan and bond assets, as well as emerging opportunities in selected distressed industries worldwide. It will concentrate on buying these exotic securities and bankrupt company bonds, loans and reorganized equity.
“Distressed debt is a bona fide asset class but typically funds have lined up to buy distressed U.S. companies and I think they’re taking a more extended high-yield approach,” said Jones, portfolio manager and managing director at Jutland.
“Our philosophy about distress is that it means one is going to have to sit and deal with recapitalizations and true bankruptcy scenarios. The contents of our portfolios are going to be biased mostly outside of the U.S., meaning Asia, Africa and Canada, which gives us a multi-currency profile.”
The fund will hold between 25 and 40 names, and will sport a two-year lockup period.
Jones said the global forestry sector currently represent a sizeable opportunity because of the housing crisis that has spread from the U.S. and around the world.
“What appears to be happening at the very moment is securities in that sector are coming up under a lot of pressure on top of the tightening of credit,” he said.
Prior to founding Jutland, a fixed income and currency shop, Jones spent nearly eight years with Bear Stearns, where he managed global investment grade and global distressed portfolios for foundations, companies and high net-worth investors.