Capula Investment Management LLP, a $13 billion hedge fund firm, hired a former Bank of America Corp. (BAC:US) executive to start a fund to trade distressed assets in Europe, adding to the number of firms betting that the region’s sovereign debt crisis will spur a fire-sale of bonds and loans.
Steven Zander joined Capula in June as a senior portfolio manager to oversee the London-based company’s first fund that will solely focus on European distressed debt, according to a person briefed on his hiring who declined to be identified because the firm is private. He registered as a Capula employee with the U.K. Financial Services Authority this month, the regulator’s website shows. Zander was previously chief investment officer of Haymarket Financial LLP.
Hedge funds and private-equity firms have raised about 60 billion euros ($74 billion) on the expectation European banks hurt by the region’s debt crisis will br forced to sell assets to meet regulatory capital requirements, according to PricewaterhouseCoopers LLP. Capula joins firms including Apollo Global Management LLC and Marathon Asset Management LP in starting funds focused on Europe.
Zander referred calls to Capula spokesman Jonathan Gasthalter, who declined to comment.
Capula, founded in 2005 by former JPMorgan Chase & Co. (JPM:US) trader Yan Huo, primarily makes so-called relative value trades in government bonds, currencies and other assets. Relative value investing involves spotting situations in which two securities trade outside their normal range and then wagering that the discrepancy will fade over time.
The firm’s Global Relative Value Fund has declined 0.5 percent this year through July 6, according to data compiled by Bloomberg. It gained 6.2 percent in 2011, when hedge funds on average declined 5.3 percent, according to Chicago-based Hedge Fund Research Inc. Capula also manages a tail-risk hedge fund that tries to protect clients from market shocks.
Zander left Bank of America Corp. (BAC:US), where he was global co- head of loan and distressed debt trading, in 2009 to join London-based Haymarket, which competes with banks to provide financing to companies that are often too small to sell bonds.
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