Tim Peterson, who founded the $7 billion Regiment Capital Advisors LLC in 1999 after a decade at Harvard University’s endowment, plans to step down from day-to- day management of the hedge fund in mid-2014.
Peterson, 51, will take on a mentoring role at the firm after he stops managing money, said Diana Pisciotta, a spokeswoman for the Boston-based credit fund. Regiment partners Mark Brostowski and Bill Heffron will continue to run the portfolios, while Thomas Sorbo and Chris Kaster will head the non-investment parts of the business.
The decision by the former Harvard high-yield bond trader to turn over the reins follows similar moves by hedge-fund founders including Thomas Steyer and Ray Dalio. Steyer, the founder of Farallon Capital Management LLC, said in October he would leave the San Francisco-based firm to focus on public service. Dalio, founder of Bridgewater Associates LP, last year relinquished his role as chief executive officer for that of “mentor,” though he continues to be the co-chief investment officer at the Westport, Connecticut-based firm.
Last week, Regiment said it would sell its $2 billion Special Situations Funds unit to TCW Group Inc., the Los Angeles-based money manager that is being acquired by Carlyle Group LP. (CG) Rick Miller and six other investment professionals who currently oversee the funds will join TCW.
The money raised by the sale will help Peterson in redistributing equity to other members of the firm, Pisciotta said.
The sale of these funds, which provide direct loans to companies, needs to be approved by a majority of investors in the Special Situations Fund V, which has yet to be fully invested, said Pisciotta. The fund has about $1.7 billion in committed capital, according to a filing earlier this year with the Securities and Exchange Commission.
Regiment has been contacting investors, which include foundations, endowments and pension funds, to explain the details of the sale, Pisciotta said, adding that Regiment is confident that clients will back the transaction.
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