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September 14, 2016  

Alumni of Milken Family Office Set to Launch

Two portfolio managers who previously worked for Michael Milken’s family office are starting a hedge fund.

From their newly formed management company, Battlebourne Capital, David Goldburg and Adam Scotch plan to invest in a variety of debt and equity instruments — with Goldburg handling debt investments from an office in New York and Scotch trading stocks in Santa Monica, Calif. That’s how they worked at Silver Rock Financial, a Santa Monica investment operation that managed portfolios of stocks, bonds and other liquid securities as part of Milken’s family office.

While Goldburg and Scotch’s separation from Silver Rock was described as amicable, it’s unclear whether Milken will invest in their fund. Nonetheless, Battlebourne is aiming to launch late this year or early next year with roughly $100 million.

Goldburg, whose title is chief investment officer, will focus on corporate bonds and loans, including distressed debt. His background includes a managing-director post at Goldman Sachs, where he once ran a $1 billion-plus portfolio of distressed loans. In 2009, he started an investment business in New York called Garnet Financial with a $200 million commitment from Milken’s family. The following year, Garnet was absorbed by Silver Rock, giving Milken’s firm a presence in New York.

Scotch joined Silver Rock in 2013 to oversee its equity investments. He previously co-founded Hylas Capital, a hedge fund shop that peaked at about $175 million. Although profitable, the firm shut down after Scotch and partner August Roth decided to part ways. Prior to Hylas, Scotch worked at Jana Partners.

Goldburg and Scotch left Silver Rock in December 2015, before chief investment officer Carl Meyer spun off the operation from Milken’s family office to raise capital from other investors. Silver Rock had been running more than $2 billion for the Milken family, The Wall Street Journal reported in June. The Journal also reported that Milken was seeding the spin-off with several hundred million dollars. In an SEC filing in June, Silver Rock disclosed regulatory assets of $1.7 billion.

Joining Goldburg and Scotch at Battlebourne is Geoffrey Gribling. He previously worked at debt-focused Caspian Capital, where he held the title of senior analyst. Gribling joined that firm in 2007 from Goldman.