Perry Capital’s Westhus Begins Plans for Distressed Fund

Todd Westhus, one of the top money managers at Perry Capital, is in the preliminary stages of starting his own hedge fund, according to people with knowledge of the matter.

The new fund, which will focus on investing in distressed assets, will be co-founded by Doreen Mochrie, another partner at Perry who oversees investor relations, the people said. Westhus, who sat on the investment committee at Perry, is planning to start the fund in early 2018, they said. Westhus declined to comment on the plans.

Perry, the event-driven hedge fund firm run by Richard Perry, said in September it would wind down its flagship fund after 28 years, citing industry and market headwinds. Perry, who posted an average return of 15 percent without ever having a down year during his fund’s first two decades, said in an interview Sept. 26 that he’d be ready to provide Westhus with capital if he decided to open his own firm.

“I have this hope that someone says, ‘I love what you guys did, your team did things that were completely different, and how can I participate with them in the future?,’" Perry said at the time.

Westhus joined Perry in 2006 and has helped oversee some of the firm’s most profitable trades, including a $2 billion windfall from betting against subprime mortgages during the financial crisis and $600 million on a four-year investment on Argentine bonds. He’s stayed on since the firm announced its closure to help manage some of the firm’s less liquid positions, which Perry had told investors could take a year or longer to unwind.

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