Dalton Preps $550M Distressed Debt Fund

Dec 15 2008 | 1:12pm ET

Los Angeles-based Dalton Investments, an Asia-focused hedge fund, is prepping a vehicle to invest in U.S. distressed assets for launch by the end of March.
The fund, which is expected to debut with 50 billion yen ($550 million), will invest in bonds sold by U.S. companies that once had triple-A-ratings and have since been cut below investment grade, aiming to profit from the high yields, Bloomberg News reports. Specifically, the fund is looking to invest in corporate bonds that are trading at 40 to 45 cents on the dollar.

Dalton is hoping that its new offering will give its ailing portfolio a much-needed boost. The firm’s Japanese Management Buyout Fund is down 27%, its Greater China Hedge Equity Fund dropped 67.67% and its Pacific and General Investments fund is down 15.71% through November, according to public databases. While most hedge funds are suffering through a tough year, those focused on emerging markets have particularly taken it on the chin.

The firm managed $720 million as of the end of November.

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