WEST PALM BEACH, FL (HEDGECO.NET) – For JP Morgan manager, Jonathan Laredo has teamed up with two other partners, Tim Gledhill and Geoff Smailes to form a new hedge fund, Solent Capital. Laredo wasformer head of structured investments at JP Morgan in its London office. He worked at JP Morgan since 2000, and has worked at Bear Sterns prior to that.
This follows the trend in which top managers in the traditional equity markets cross over to hedge fund arena. Generally such managers are attracted to hedge fund market because of the opportunities and greater compensation offered to hedge fund managers [Hedgeco.net Previous Story]. Part of the reason stems from the fact that traditional managers are compensated solely on the basis of the total assets managed, but hedge fund managers receive performance fees commensurate with the funds gains.
Tim Glenhill was formerly co-head of structured credit products at Merrill Lynch in its London establishment, while Smailes was a member of the managing board of emerging market portfolio at Credit Suisse First Boston.
The Solent Capital hedge fund would utilize credit arbitrage according to the statement; the fund began trading late last month, and was seeded with about $120 million, Laredo did not disclose the sources of the seed capital, he however said that the seed money includes a significant investment from an undisclosed institution. The target return for the Solvent Capital fund, Laredo maintained �are realistic given moderate leverage and should generate NAV growth in the low teens with volatility�.
According to Laredo, the Solent capital fund would be �trading investment grade and some crossover names� in the credit derivative as well as the securities market. Laredo said, �We are pretty disposed to trade short, although that is not especially easy at present. Strategies will include basis trades, occasional directional trades, debt against equity, indices and bespoke baskets.� Fee structure for the new Solvent Capital funds was not immediately available.
Paul Oranika
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