Swiss fund of hedge funds shop Gottex Fund Management has taken a controlling stake in U.S-based firm SJC Capital Partners.
The U.S. asset management firm, which was founded last year by Stephen Czech, specializes in provided secured loans to middle market companies that are unable to obtain loans from traditional sources due to the credit crisis.
Gottex is banking on the direct lending market, which its expects to continue to be “a very attractive investment space in the years to come as traditional financing sources for the middle market continue to contract or exit this market segment.”
Czech founded SJC Capital last September after leaving Greenwich, Conn.-based special situations shop Contrarian Capital Management.
Last month, Gottex reported that after seeing its shares lose 95% of their value last year, the firm is still on a bumpy road. Its assets under management fell 12.2% in the first quarter, with almost half of the decline the result of clients heading for the door. Investor redemptions totaled US$480 million during the first three months of the year. Deleveraging and rebalancing accounted for another US$480 million in losses, while the actual investment performance of the firm’s funds resulted in US$250 million in losses.
On a brighter note, Gottex said 83% of investors in its market-neutral fund had remained following a recently-completed restructuring. Further restructurings are expected in June. And the firm said it was strongly liquid, with US$45 million in cash on had, and no debt at the end of last year.