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September 13, 2017  

Private-Debt Demand Propels Sound Point

Sound Point Capital’s growth streak shows no signs of abating.

The New York debt shop, led by Stephen Ketchum, has hired five staffers in the past few weeks as its assets under management topped $13 billion — up about $4 billion in the last 12 months. And the firm is getting ready to launch another hedge fund.

Sound Point is riding a wave of investor demand for alternative-credit strategies including distressed debt and direct lending. In a recent survey by Preqin, nine out of 10 institutional investors said their private-debt positions had met or exceeded their expectations — and more than half planned to increase their commitments in 2017.

The new hires include two investment professionals: senior credit analyst Tim Andriks, who arrived this month from Apollo Management, and loan originator Michael Clifford, who joined the firm’s commercial real estate team. Clifford, who is based in Los Angeles, last worked at Realty Finance, a non-traded commercial-mortgage REIT.

On the operations side, Sound Point added client-service specialists Jean Hsu and Sydney Scott. Scott most recently worked at Marathon Asset Management, while Hsu joined from Hong Kong hedge fund shop LIM Advisors. Sound Point also hired accountant Jake Urkowitz, who previously worked at PricewaterhouseCoopers.

The additions — on top of 10 positions created last year — bring the firm’s headcount to 56.

Meanwhile, Sound Point is seeking to raise up to $400 million for a new vehicle dubbed Strategic Capital Fund, which would originate loans to financially troubled companies in North America with enterprise values of $500 million to $3 billion. The fund is expected to begin investing before yearend.

Sound Point’s hedge funds also include:

The flagship Sound Point Credit Opportunities Fund, a long/short credit vehicle that has $1.3 billion under management.

Sound Point Senior Floating Rate Fund, which had about $850 million at the start of the year.

Sound Point CLO Fund, which invests in the equity pieces of the firm’s own CLOs.

Altogether, Sound Point manages about $1.7 billion in hedge funds, $3 billion in long-only vehicles and $8.3 billion via CLOs.

Ketchum, a former investment banker, founded Sound Point in 2008 with some principals of Stone Point Capital, a private equity firm in Greenwich, Conn. In April, Neuberger Berman’s Dyal Capital unit acquired a passive minority stake in Sound Point.

CORRECTION (9/20/17): This article has been revised. The original version misidentified a hedge fund run by Sound Point Capital and understated its assets. The correct name of the vehicle is Sound Point Senior Floating Rate Fund. It had $850 million at the start of the year and currently manages $1 billion. The article also mischaracterized the firm’s strategy mix. It runs $1.7 billion in hedge funds, $3 billion in long-only vehicles and $8.3 billion in collateralized loan obligations.