Blackstone Said to Be in Talks to Back New Distressed FundBei Hu
Blackstone Group LP is in talks to back a Hong Kong-based distressed fund started by Jason Brown, a former global head of Goldman Sachs Group Inc.’s Special Situations Group, said two people with knowledge of the matter.
Brown’s Arkkan Capital Management Ltd. will focus on Asian opportunities with the flexibility to invest globally, said the people, who asked not to be identified as the information is private. It would be the second time Blackstone backs an Asia-based hedge fund since the 2008 global financial crisis.
Arkkan is seeking the support of the world’s largest manager of alternative investments to stocks and bonds to help it attract other big institutional investors. Blackstone’s backing of Hong Kong-based Senrigan Capital Group Ltd. allowed it to grow assets to more than $1 billion in less than two years.
Peter Rose, a New York-based Blackstone spokesman, declined to comment.
New funds in Asia raised an average $20 million each in the first half, according to Singapore-based data provider Eurekahedge Pte.
Brown ran Goldman Sachs’s global Special Situations Group, which invests in distressed debt and companies using the bank’s own capital, between 2011 and his departure last year. The unit, known as SSG, is part of the investing and lending operations, which generated $4.3 billion of pretax earnings last year, the most of the New York-based bank’s four business segments.
Brown, a partner based in Hong Kong, had led SSG in Asia from 2007 before his promotion to the global role, according to a memo obtained by Bloomberg News in 2011.
Arkkan received a license from Hong Kong’s Securities and Futures Commission in December, according to information posted on the regulator’s website.
Blackstone in 2009 committed $150 million to Senrigan, a Hong Kong-based event-driven hedge fund manager headed by Nick Taylor, a former Citadel LLC executive. A seeder typically provides startup capital to new hedge funds in exchange for an equity stake in the manager or a cut of its fee revenue.
SSG invests in the debt and equity of troubled companies and makes loans to high-risk borrowers. Its investments have included those in Japan’s largest golf course operator Accordia Golf Co. and pizza-chain Sbarro Inc.
Mark McGoldrick, a former global co-head of SSG, in 2008 co-founded New York-based Mount Kellett Capital Management LP, which makes distressed assets, special situations investments worldwide. It oversees $7 billion of assets, according to its website.
Chris Mikosh, a former SSG managing director, co-founded Tor Investment Management (Hong Kong) Ltd. with Patrik Edsparr, previously a Citadel LLC executive, according to a December 2013 statement from backer Grosvenor Capital Management. Tor invests in credit and special situations across Asia, it said.
The Eurekahedge Distressed Debt Hedge Fund Index returned 4.3 percent in the first seven months, outperforming the 2.8 percent gain of the data provider’s global hedge-fund gauge. The strategy returned 16 percent last year, the best performing of nine strategies, according to Eurekahedge’s website.