- Executives at Silver Rock are beginning to seek outside money
- Milken will seed fund, won’t own or run it, Journal says
Executives who have been managing the personal wealth of Michael Milken at his family office Silver Rock Financial LLC have started a hedge fund and are seeking outside money, the Wall Street Journal reported, citing regulatory filings and people familiar with the matter.
Milken will seed the firm with several hundred million dollars, the Journal said, citing the unnamed sources. He won’t own the firm or help run it, a spokesman told the newspaper.
“Mike has never had any interest in being in the money management business and has no interest in being in that business now or ever,” the Journal quoted the unnamed spokesman as saying.
Milken, the former head of junk-bond trading at Drexel Burnham Lambert Inc. in the 1980s, pleaded guilty to securities fraud in 1990 and was permanently barred from serving as a broker or investment adviser. In 1998, Milken agreed to forfeit $47 million in consulting fees and interest to settle claims he had violated the ban; he didn’t admit or deny wrongdoing.
Silver Rock Chief Investment Officer Carl Meyer, a former Citigroup Inc. executive, will control the new firm and have a staff of about 10 executives, the newspaper said. Until recently, the family office was based in the same building as Mr. Milken’s office in Santa Monica, California, but the executives leased new space in Los Angeles when they formed an independent entity on March 25, according to the Journal.
The executives had been managing more than $2 billion for Milken and his family in junk bonds and distressed loans, along with stocks, the Journal said. The firm has run into challenges recently because of poorly timed energy investments and Milken’s insistence to hold a large cash allocation, according to the newspaper.
The executives hope to expand the firm as an independent entity and better retain talent, the Journal wrote.