Aylward Said to Raise $300 Million for London Credit Hedge Fund

  • Former Highbridge money manager to oversee funds for Paloma
  • Sona Asset Management started trading earlier this month

John Aylward has received about $300 million from investment firm Paloma Partners LLC for his new London-based credit hedge fund, according to two people with knowledge of the matter.

Sona Asset Management started trading earlier this month and will manage money exclusively for Paloma for a time before raising capital from external investors, said the people, asking not to be identified because the information is private. Officials at Sona and Paloma Partners declined to comment.

Aylward is a former portfolio manager at Highbridge Capital Management LLC and Sona, which takes its name from the Irish word for fortunate and makes long and short investments in credit markets, is among a small group of hedge funds to have attracted new money in Europe this year, with many peers suffering outflows. 

Disappointed by poor performance and high fees, investors pulled a net $55.9 billion from hedge funds globally in the first seven months of the year, according to an eVestment report. Fixed income funds suffered withdrawals totaling $28.5 billion.

Aylward left Highbridge in May, according to records with the Financial Conduct Authority, and hired five former colleagues to help build the new investment firm. Aylward previously managed money for Claren Road Asset Management LLC and was head of high-yield trading at Deutsche Bank AG.

Paloma Partners, founded more than 30 years ago by Donald Sussman, has a history of backing hedge-fund managers, including New York-based D.E. Shaw & Co. and London-based LMR Partners LLP. The investment firm has boosted assets by $1.3 billion this year to $5.3 billion after gaining 11 percent in 2015 and 2.5 percent through mid-September in 2016.