Thames River Capital has announced full details of its new fund of distressed hedge funds, as revealed in last month's International Investment.
The fund offers access to a diversified yet focused portfolio of highly experienced distressed managers, a number of whom are 'closed,' but Thames Capital has been able to secure limited capacity.
According to the fund's brochure, established distressed managers have not been so excited about the supply of opportunities since the early 1990s, and before that in 1933.
'In each of those periods, a recession coupled with an abundant supply of companies in default combined to create an exceptional investment environment for distressed investors.' As the recession faded from the early 1990s cycle, distressed investors were able to produce in excess of 20% returns over the following three years, it adds.
'As the average time a company spends in bankruptcy is around 22 months, now is the time to invest, as recent and current defaults should play out over the next three to five years, therefore creating an exceptional, 'low hanging fruit' opportunity'.
The fund will be managed by Ken Kinsey-Quick, and will be available in sterling, euro and US dollars. The management fee is 1% pa, with a 10% performance charge. The lock-up period is 12 months. Redemptions within that period will incur a 3% penalty.
The proposed initial portfolio will include everything from large, well-established funds like the $8bn Cerberus fund and the $3.5bn Avenue fund down to small boutique funds.
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected