Atalaya Raises $250 million, Targets Bank and Credit Opportunities

New York-based Atalaya Capital, headed by investment management veteran Ivan Zinn, has closed its third fund offering with $250 million AUM with plans to aggressively take advantage of special opportunity investments in the small and middle credit markets, particularly those in the distressed banking sector.

“Banks are continuing to fail at a faster pace than they did last year, with FDIC chair Shelia Blair expecting more bank failures in 2010 than 2009,” Atalaya said in a press release “More than 40 banks have failed in the first quarter of 2010 and the FDIC has included 702 banks with $402.8 billion in assets on the critical list as of Dec. 31.”

“With more than $100 billion in bank assets seized year‐to‐date, this has created an unparalleled opportunity to purchase divested assets at significant discounts to face and intrinsic value.” Atalaya said.

Atalaya’s Fund III will continue Fund II’s track record of opportunistically purchasing illiquid credit assets from banks, the FDIC, commercial finance companies and other financial institutions in search of liquidity. Fund III will also originate select primary private credit investments.

Investors for the fund are primarily university endowments and foundations, demonstrating a return in appetite for illiquid assets investment opportunities that all but dried up last year. Despite a difficult fund raising environment, Atalaya was able to close the fund after attracting subscriptions in excess of its self imposed $250 million hard cap in just over three months.

Zinn has executed over $1 billion in special opportunity investments and founded Atalaya in 2006 to capitalize on his expertise in sourcing and investing in special opportunities. Zinn is a Donaldson, Lufkin & Jenrette Inc. and Highbridge Capital Management LLC alum, who most recently headed special situation investments for hedge fund HBK Investments LP.

About Alex Akesson

Alex has been specializing in hedge fund and alternative investment news since April 2006. Working mainly in research and manager interviews, she has published breaking news on the hedge fund industry on her blog, as well as several industry publications. Her access to hedge fund managers gives her insight into news stories as well, and the ability to track press releases and other breaking news in real time.
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