The spinoff of credit hedge fund manager Caspian Capital LP from parent Mariner Investment Group LLC is getting an enthusiastic thumbs-up from institutional investors and consultants.
The 15-member Caspian Capital team set up shop in New York last week, bringing with them the $2.6 billion they managed in two hedge funds and five separate accounts while at Mariner Investment Group, which is headquartered in Harrison, N.Y.
Caspian has formally separated from Mariner and will register as an investment adviser with the Securities and Exchange Commission later in the first quarter, according to sources close to both firms who asked not to be identified.
The move will reduce Mariner's total assets under management by 22% to about $9 billion. Mariner will retain a minority equity stake in Caspian; the remainder will be owned by Caspian employees.
The Caspian team is led by the firm's principals and co-portfolio managers Mark Weissman, who founded Caspian in 1997, and Adam S. Cohen and David Corleto.
The firm's flagship event-driven debt hedge fund approach focuses on distressed and stressed securities, capital structure arbitrage and value short strategies. Its first fund, Caspian Capital Partners LP, was launched March 1, 1997, and experienced one down year (2008) since inception. Annualized performance through Oct. 31 was 11.6%.
The CCP fund has been closed to new investors since 2008 and has a largely high-net-worth investor base.
The firm's $1.2 billion Caspian Select Credit International LP was launched in 2007. It uses a similar, but more liquid, strategy than CCP and has had similar returns. Between 60% and 70% of CSCI's investor base is institutional. The investor breakdown in Caspian's five separately managed hedge fund accounts, totaling $700 million, could not be learned.
Consultants said clients invested in Caspian's funds will not redeem their investments because of the impending spinoff and, in fact, consultants are recommending Caspian for credit investments to other clients.