Hedge Fund Backer Makes High-Stakes Offer in Europe Drive
- New York-based Prelude Capital hires first employee in London
- Investment firm specializes in providing first-loss funds
Photographer: Matthew Lloyd/Bloomberg
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A U.S. investor who has backed hedge fund managers from John Paulson to Kyle Bass is pushing into Europe to offer managers an unusual choice: They can take a bigger share of profits with the catch that they risk losing all their money if the bets go awry.
New York-based Prelude Capital Management, which specializes in a niche offering called first-loss funds, has hired former Bank of America Corp. prime brokerage executive Adam Karp to lead its expansion within Europe, according to people with knowledge of the matter. First-loss funds typically offer hedge fund managers an opportunity to hold on to more than half their profits, in exchange for taking on the bulk of the risk.