Bloomberg News

MKP Capital to Start London Team for European Debt Opportunity

December 06, 2011

Dec. 6 (Bloomberg) -- MKP Capital Management LLC, the New York-based global macro and structured-credit hedge fund with $4.5 billion in assets, is starting a credit team in London to invest in European debt.

Steven Jeraci, a partner at MKP, will relocate to the firm’s London office to hire investment professionals and build the team’s infrastructure, the hedge fund said in a statement scheduled for release today, a copy of which was obtained by Bloomberg News. The team should be in place by the end of next year, the company said.

U.S. asset managers are increasingly looking to Europe as the continent’s sovereign-debt crisis has created investment opportunities. Hedge fund and private-equity firms such as Apollo Global Management LLC have raised about $7 billion for funds targeting European distressed assets since 2009 and are seeking another $7 billion, according to London-based researcher Preqin Ltd.

“Considering Europe’s influence on markets globally, plus the risks and rewards being created by the transformation of the European financial system, MKP’s investors will clearly benefit from an expansion of our European credit presence,” Patrick McMahon, chief executive officer of MKP, said in the statement. “A credit team in London will naturally complement our existing macro and credit teams by providing on-the-ground intelligence and surveillance.”

MKP Opportunity Fund

MKP Opportunity, the firm’s global macro fund with more than $1.5 billion in assets, climbed 1.2 percent last month through Nov. 25 and 12 percent this year, according to a person briefed on the returns, who asked not to be identified because the information is private. Macro funds seek to profit from broad economic trends by trading currencies, bonds, stocks and commodities.

The $2.5 billion MKP Credit fund increased 0.4 percent last month through Nov. 25 and declined 5.2 percent this year, the person said. Hedge funds fell 2.9 percent through October as the European debt crisis roiled global markets, according to the Bloomberg aggregate hedge-fund index.

A spokesman for MKP declined to comment on the returns.

MKP, co-founded by McMahon, Maurice Perkins and Eric Keiter in 1995, seeks to capitalize on economic trends and trades various credit holdings, with a focus on residential and commercial mortgage-backed securities and asset-backed securities. Perkins will retire from MKP at the end of the year, the firm said in July. Keiter retired in 2006.

To contact the reporter on this story: Kelly Bit in New York at kbit@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net


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