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August 07, 2019  

Private Equity Shop Preps Debt Hedge Fund

Antarctica Capital, which runs a $2 billion private equity fund, is crafting a debt-focused hedge fund.

The New York firm plans to launch the vehicle in the fourth quarter with $50 million to $100 million. Antarctica recently hired two veteran debt investors, and now is in the process of selecting a prime broker and other service providers.

The fund would take an opportunistic approach to trading credit instruments, with an emphasis on structured products. Antarctica believes the vehicle would be well positioned to capitalize on market dislocations it expects to materialize in the coming years.

In June, the firm hired Andrew Jarmolkiewicz as portfolio manager for the new fund. He previously spent nearly 10 years running WestCay Asset Management in the Bahamas, and earlier was a co-founder of London-based debt shop Cairn Capital.

Jarmolkiewicz will be assisted by Patrick Gonzalez, who joined Antarctica last year and focuses on debt investments for the private equity vehicle, and director Andre Vollmann, who came on board in June. Vollmann previously worked with Jarmolkiewicz as a portfolio manager both at WestCay and Cairn.

Antarctica, led by Chandra Patel, runs a single private equity fund called 1818 Acquisitions that invests in energy- and transportation-related infrastructure, insurance and special-situations debt. The fund, which began investing in 2016, has just eight limited partners, including such high-profile investors as China Life; CIC Capital, an arm of China Investment Corp.; Munich Re and TIAA.

Antarctica’s investments have included companies that operate parking facilities. In 2016, for example, it teamed up with TIAA to lead an investor consortium that purchased InterPark from infrastructure investor Alinda Capital.

An affiliated broker-dealer, GNU Securities, advises clients including Antarctica on mergers and acquisitions and capital-raising.

At WestCay, which functions mainly as a family office, Jarmolkiewicz traded commodities and securitized products. At Cairn, which currently runs more than $4 billion, he was involved with product development and debt restructurings — including some of Cairn’s own vehicles during the credit crisis. Jarmolkiewicz earlier worked at Merrill Lynch.