Investcorp Bids Credit Hedge Fund Adieu

Mar 27 2009 | 9:14am ET

It looks like the 16-month marriage between hedge fund seeder Investcorp and Washington Corner Capital Management, a distressed and credit-focused hedge fund, is over.

Spokesmen for Investcorp confirmed that the $4 billion seeding firm is unwinding its $50 million investment in the emerging hedge fund, which it seeded in November 2007. The firm was unavailable for further comments.

“We’re not under pressure to sign up funds, but, for example, we got Washington Corner and Stoneworks Asset Management at about the same time because we thought both of them were interesting,” Deepak Gurnani, co-head of Investcorp’s hedge fund, told FINalternatives at the time.

Ed Banks, founder of Washington Corner, added that the Investcorp model takes no ownership stake and has a definitive “sunset” date with no buyout clause or lingering alliances.

“There are pluses and minuses to having somebody like Investcorp behind you,” said Banks. “Obviously, the economic split is a cost, but the benefit is the high-end institutional infrastructure that they have and that type of seeder takes away a lot of headaches.”

Investcorp’s single-manager platform opportunistically invests up to $50 million in managers across a range of strategies, including global macro and distressed strategies.  The firm aims to sign up two to three funds to its paltform—which manages some $900 million in total assets—each year.


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