BOSTON (Reuters) – Solel Partners is expected to start trading with more than $400 million in capital later this year, after the new hedge fund received commitments from pensions, endowments and the founders’ former boss, who ran hedge fund Highfields Capital, two people familiar with the matter said.
Boston-based Solel, which is being launched by Craig Peskin and Peter Fleiss, will be the first, and likely the largest spinoff, from Highfields, a $12 billion fund that stopped managing money for outside clients last year.
Highfields’ co-founder Jon Jacobson is backing the pair with a significant investment of his own, and he is urging others to do the same.
Jacobson wrote to his clients earlier this year saying that Peskin and Fleiss, who worked for him for more than a decade, helped deliver strong returns at Highfields and are worth a look. He will be a significant limited partner in their fund, declining to say how much money he has put in.
As a group, Solel’s investors have already committed $400 million and the figure could reach $750 million by an Aug. 15 deadline, one of the sources said. Peskin and Fleiss declined to comment.
Funding from a former boss who is an investor is often a critical first step in signing up new clients, especially at a time many institutions have become wary of hedge funds, disappointed by years of lackluster returns coupled with high fees.
Data from Hedge Fund Research shows that hedge fund launches last year stood at their lowest since 2000 with only 561 newcomers recorded. No data for 2019 has been released.
The Solel partners, who named the firm after their grandfathers who sparked their interest in investing, will make bets on equities and credit, targeting consumer, financial, retail and certain technology and healthcare companies.
A number of former Highfields analysts, including Robert Sigman, Noah Kolatch and Robin Hollenstein, have also joined the firm. William Stone is the firm’s chief financial officer.
Reporting by Svea Herbst-Bayliss