Eyck Capital Management will be going live with its European Tactical Distressed Opportunities Fund on April 1, founding partner Khing Oei confirmed to Private Debt Investor.
The former managing partner at Halcyon Asset Management said the fund was launched to offer investors the chance to exploit the leverage in mispriced European securities.
“The high yield market is booming despite the lack of growth in the European economy, and offers enormous opportunities for debt hedge fund managers,” Oei told Private Debt Investor. “Our strategy exploits the nuances of the mispricing of European securities by shorting lower quality issuers and going long on more robust issuers.”
The European Tactical Distressed Opportunities Fund switches between long and short positions in high yielding bonds, bank loans, convertible bonds and even leveraged equity. “Due to the nature of the fund, and the fact that we are adopting a massively hedge fund-orientated strategy, we are continually looking across a wide spectrum of asset classes to succinctly cover highly leveraged opportunities.”
Oei began marketing the fund over a year ago, and has built a long pipeline of transactions already. The hedge fund manager has secured commitments from a university endowment, a hedge fund of funds, and also family offices across Europe and the US.
Eyck Capital hopes to meet its target for managing between $500 million to $1 billion assets. The fund manager is targeting returns of between 12 percent to 15 percent.
“Distressed debt funds have historically been very difficult to structure, and have become overall more commercial,” said Oei. “Our competitive edge is that generally we are more focused on the liquid end of the spectrum which means anything we buy, we have to be able to sell within three months. Also, we have a leveraged long-short strategy, and we also hold a small portion of leveraged equity in our fund.”
Prior to establishing Eyck Capital, Oei was a managing principal at the $10 billion multi-strategy hedge fund manager Halcyon between 2006 and 2011. He was also formerly a portfolio manager at New York-based Fortress Investment Group and Goldman Sachs.