MLR Cap Up On Distressed Plays

Dec 1 2006 | 5:14pm ET

New York-based MLR Capital Management’s MLR Capital Fund, which invests in credit and special situation opportunities, is having a breakout year in its first full year of trading. The fund, which began trading in August 2005, is up an estimated 15.7% year-to-date through November, and is currently managing some $27 million in assets.

Ryan Rapp, partner and portfolio manager, said the fund’s performance has been evenly distributed industry-wise. “We break it up into $1 billion plus enterprise value and less than $1 billion and it is pretty evenly split there,” he said. “We have a highly diversified portfolio with some 85 positions and even with the default rate below 1% there’s still more than enough opportunities for a firm our size and even up to $200 million.”

Rapp added that he expects the portfolio to turn over quickly within the next few months resulting in solid returns for the fund. “Of the stuff in our book that we think we’re going to make a lot of money on, two-thirds of it is going to be in the first quarter of 2007,” he said.

The MLR Capital Fund charges a 2% management fee and 20% for performance with a $1 million minimum investment requirement.

Rapp, a former junior portfolio manager at Jemmco Capital Corp., is joined by Michael Layden, partner and portfolio manager, who served as a senior research analyst at Marathon Asset Management with a focus on distressed debt and special situations in Latin America, U.S. and Europe.  Robert Mullarkey, former vice president in the capital markets division of First Albany Capital, rounds out the MLR team as a partner, chief operating officer and director of marketing.

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