Alden Unveils Distressed Hedge Fund

Jan 21 2009 | 4:05am ET

New York-based Alden Global Management, an affiliate of the Randy Smith family office, has launched a distressed hedge fund to tap into the growing list of financially troubled finance companies in the U.S.

The Alden Global Distressed Opportunities Fund debuted in November with about $390 million of proprietary capital and an additional $10 million in institutional capital, according to sources familiar with the firm. The fund certainly got off to a fast start, returning 30.5% last month and 32.3% in its first two months of trading. Sources said the fund was heavily focused on U.S. financial firms in December, and is currently looking to add homebuilding, gaming and auto-related names to its portfolio.

While Alden’s latest offering has soared in its short lifespan, the same cannot be said of the firm’s existing funds. Its Global Emerging Market Fund, which launched in July with $100 million of principal capital, was down 50.65% through October, according to data obtained by FINalternatives. The firm’s Global India Fund, Global MENA Fund and Global Russia Fund also lost between 30% and 76% during the same period.

In fact, the firm shuttered its Russia Fund last month after it lost 61.6% last year. Sources said while most of Alden’s funds, which were heavily long-biased, did much better than their indices, “it was just a challenging time in emerging markets.” Indeed, the biggest losers last year were long-only funds, which fell 41.08% last year and emerging markets funds, which dropped 39.44%, according to HedgeFund.net.

The Global Distressed Opportunities Fund charges a 2% management fee and a 20% incentive fee with a minimum investment requirement is $2 million.


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