03/12/2014

European-Debt Shop Targeting US Investors

Look for debt-fund operator Northlight Group to begin marketing to U.S. investors in the second half.

The London firm has delivered steady gains in the four years since launching its Northlight European Fundamental Credit Fund, which mainly trades European junk bonds. The vehicle, which has $125 million under management, returned 12.5% last year, following gains of 6.3% in 2012, 3.7% in 2011 and 9.2% in 2010.

Although the fund counts a handful of U.S. limited partners, the firm hasnít before actively marketed in the States. Why now? Because of growing appetite for debt of European companies and governments among U.S. investors. The planned roadshow in the States will be led by senior Northlight executives, including head trader Shahar Zer. Nicolas Mueller oversees business development.

Northlight investors pay a 1.5% management fee and 15% performance fee.

Zer and his partners, Cyril Armleder and Charles-Henri Lorthioir, debuted their fund in 2009. The management company was doing business as Limestone Advisors until last year, when a restructuring presented an opportunity to change the name of the firm to match that of the fund. Under the restructuring, the firmís original backer saw its stake in the business reduced from a majority to a minority position.

Northlightís investment team takes a fundamental approach to trading high-yield corporate bonds. Lorthioir is in charge of research, while Armleder oversees risk.

Before teaming up with Zer, Armleder and Lorthioir worked together at GLG Partners from 2005 to 2009 as key members of a team that ran the firmís GLG Credit Fund. Armleder was co-portfolio manger and Lorthioir was head of credit research. Before that, they both worked at Goldman Sachs.

Zer previously traded European debt at J.P. Morgan and Lehman Brothers. Mueller, who joined Northlight in 2012, previously held leadership positions at Merian Capital and Man Group.

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