Highbridge hires Kapnick to launch buyout business

New York-based hedge fund Highbridge Capital Management has reportedly hired former Goldman Sachs director Scott Kapnick to launch its private equity business. It is the latest example of the increasing convergence between the two asset classes.

Scott Kapnick, former global co-head of Goldman Sachs’ investment banking business, has reportedly joined Highbridge Capital Management, a hedge fund owned by JPMorgan Chase, as managing partner and chief executive of its new private equity business.

The Financial Times reports that Kapnick has been appointed to run a “principal strategies” team that will raise and invest two funds worth up to $2 billion each. The first will be a credit fund to invest in mezzanine and distressed debt, while the other will be a private equity fund.

Kapnick joined Goldman Sachs in 1985, becoming a partner of the firm in 1994. He held various senior roles in the bank, running the Frankfurt office before taking over from Peter Weinberg – who left to found boutique Perella Weinberg – as co-chief executive of Goldman’s European business in January 2005. Following Lloyd Blankfein’s appointment as chief executive last year, he lost this position, but retained his role as co-head of the bank’s global investment banking arm.

Kapnick left Goldman in December last year, the latest in a series of high-profile departures. In addition to Weinberg, former European president Simon Robertson and Richard Sharp, head of the bank’s buyout arm, have also stepped down recently.

The hedge fund and private equity worlds have been overlapping more and more. Buyout firms such as The Blackstone Group and The Carlyle Group now manage hedge funds, while a number of hedge funds like Centaurus Capital and SAC Capital Advisors have been encroaching on the buyout space.

Highbridge is one of the biggest hedge funds in the world with about $35 billion under management. Its assets have increased fivefold since JP Morgan bought a majority stake in 2004.

JP Morgan Chase no longer manages third party private equity funds but it makes private equity investments from its own balance sheet through its One Equity Partners business.