Former Lehman, R3 Trader Sets Up Credit Hedge Fund

Jun 26 2009 | 3:43am ET

Another day, another new credit hedge fund: Lehman Brothers veteran Assan Din is setting up a new vehicle focused on corporate bonds and derivatives in Asia.

Singapore-based SaKa Capital plans to launch its maiden hedge fund in September with between US$25 million and US$50 million, Din said. But the SaKaCapital Liquid Credit Fund has a capacity of more than $500 million, and the firm plans to market it to institutional investors after it develops a track record.

Din told Bloomberg News that his new fund is targeting 15% annual returns with “moderate leverage.” In addition to its bread-and-butter, corporate bonds and derivatives, Saka Capital will also invest in convertible debt, credit indices, liquid options and some stocks. He said that Asia is the most likely region to enjoy economic growth over the next few years, offering funds like his opportunities unlikely to be taken advantage of by banks and existing hedge funds.

“The days of large principal businesses at banks competing with hedge funds is over for the foreseeable future,” he said. “Banks and existing funds are suffering from illiquid legacy positions on their balance sheets and hence are handicapped to take advantage of the credit opportunity today.”

Din ran Lehman’s credit trading business in Europe and Asia until his departure in 2006. He was part of the group that set up R3 Capital Management, the $1.5 billion credit hedge fund spun off from Lehman last summer. Din left R3 before its acquisition by BlackRock in April.

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