Troy Dixon in sweet spot with new structured products hedge fund

Troy Dixon, an ex-Deutsche Bank RMBS trader, has recently set up Hollis Park Partners in New York and is working on the launch of a hedge fund that will seek to seize the “significant opportunities” in the $13.5 trillion structured products market.

Troy Dixon, who managed around 70 traders and 100 support people as co-head of structured products at Deutsche Bank, left the bank in October 2013 after almost eight years there – and 20 years on Wall Street in structured products.

He sat on the America’s executive committee at the bank so he also understood the business side of launching a hedge fund, according to Ajai Thomas, his new head of investor relations and a former colleague. This is why he assembled a team of eight people for his new independent venture, Hollis Park Partners, which offices opened a couple of months ago. The investment team includes Joe Valentine, an ex Navy Seal who is an investor into Academy (formerly known as Blackwater) and a derivatives trouper, and Taranjit Sabharwal, who reported to Greg Lippman (previously Head of all Non-agency RMBS, ABS and CDO Trading at Deutsche Bank) and was part of the group that executed the winning subprime trades.

Troy Dixon is not the first ex-Deutsche man to set up his own shop. As well as Greg Lippman who co-founded LibreMax in 2011, Boaz Weinstien left to set up Saba Capital Management in 2009, Philip Weingord launched Seer Capital in 2008, and Anilesh Ahuja founded Premium Point the same year.

“We are currently focused on building institutional quality infrastructure at Hollis Park; selecting service providers that are adept at supporting our strategy, implementing a robust risk management process, and focusing on the design aspects of building a hedge fund business with a core emphasis on capital preservation,” Troy Dixon tells Opalesque in an interview.

Hollis Park will seek to take advantage of opportunities in the structured products market through a diversified portfolio of long and short positions in both cash and synthetic instruments, primarily in US and European markets.

According to Dixon, Hollis Park is set up to be dynamic, nimble, and to look at the broad spectrum of structured products. It will trade of the entire suite of products from Agency MBS through CLO Equity and will never have an allocation of less than 50% agency MBS in order to maintain overall liquidity. The philosophy is that one cannot successfully manage a structured product business with a single strategy anymore, hence the range of products. For this, Hollis Park has portfolio managers with expertise in each one of the product classes.

“That being said,” Dixon adds, “most investors think of only the credit portion when thinking about the structured product universe due to the bust and boom of that sector over the last six years. The reality is that those sectors represent only a portion of the tradable $13 trillion structured product space.”

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