12/16/2009

Investors Queue Up for Bay Harbour Launch

Distressed-investment specialist Bay Harbour Management is putting the finishing touches on a hedge fund that is expected to have $500 million under management by midyear 2010.

The New York firm plans to launch BHR Master Fund on Jan. 1 with about $300 million of investor equity. The fund is designed to make special-situations investments in the debt of distressed U.S. companies. Once it reaches the $500 million mark, BHR would close to new investors.

In a marketing environment where any fund launch north of $100 million is considered impressive, Bay Harbour apparently is capitalizing on investors' appetite for credit-opportunities investments, pitching equity-like returns with less risk.

As it has in the past, Bay Harbour has teamed up with Neil Ramsey, who runs RQSI of Louisville, Ky., to create BHR Master Fund. The vehicle will be managed by a new firm, BHR Capital, which is operating out of Bay Harbour's offices.

The principals of BHR Capital, including Ramsey, are kicking in a combined $100 million of equity for the fund launch. BHR's principals also include Steve Van Dyke, the founder and managing partner of Bay Harbour, and Michael Thompson, who is a principal of Bay Harbour. Van Dyke is chief investment officer of BHR Capital, while Thompson is portfolio manager of the new fund. Ramsey, Van Dyke and Thompson all serve on the fund's investment committee.

Bay Harbour has partnered with Ramsey on a series of initiatives over the past 20 years. Overall, Bay Harbour manages about $400 million of hedge fund assets, not including BHR Master Fund. The firm also is approaching the first close for a private equity fund that is expected to raise $400 million before holding a final close.

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