Oceanwood Capital Management's Deputy CIO Julian Garcia Woods is striking out on his own, and the hedge fund he co-managed with founder Christopher Gate is shutting down.
Mr. Woods, who has been at Oceanwood since 2007, is taking a team from the firm and plans to launch CoreLane Capital Management early next year, according to Andrew Baker, head of business development at the London-based company. Oceanwood will return capital to investors while Mr. Gate, 59, is retiring, he said.
Oceanwood's Opportunities Fund, which managed more than $2 billion in peak assets, currently runs about $500 million. Some of the capital will be transfered to Mr. Woods' new firm, with Mr. Gate also investing in the startup, according to Mr. Baker, who will become CEO of CoreLane. Mr. Gate didn't respond to emails seeking comment.
The new fund will run a concentrated portfolio of equity and credit bets, focusing on European special situations investment opportunities. CoreLane will build its portfolio around corporate actions such as spinoffs, mergers and acquisitions, reorganizations, bankruptcies and recapitalizations.
Mr. Wood said in an interview that a restructuring of European corporates has long been held back by a lack of confidence among executives, mostly due to macro concerns including growth and events such as Brexit. But post COVID-19 pandemic, many of those worries have gone away, and European CEOs now feel the time is right to simplify their businesses, selling or spinning off underperforming parts.
"The four largest European spin-offs have happened in the last couple of years, and we believe there are many more to come," Mr. Woods said.
Mr. Woods faces a tough capital raising environment for startups as investors migrate toward the largest players, especially those focused on combining multiple trading strategies to produce diversified and stable returns. More than 2,500 hedge funds have shuttered over the last five years, exceeding launches during the period, according to data compiled by Hedge Fund Research.
Founded in 2006 by Mr. Gate and an investment team from Tudor Investment, Oceanwood has been one of the largest event-driven hedge funds in London.
Sizable bets since its inception have included NH Hotel Group, Spanish lender Unicaja Banco, Norske Skog and a short wager on scandal-plagued payments processor Wirecard. At times, it has turned an activist investor in companies ranging from NH Hotel, Merlin Properties Socimi to Just Eat Takeaway.com.
Oceanwood's Opportunities Fund gained about 2% through July this year after losing 8% in 2022.
