Kite Lake to launch diversified credit fund led by former Tyrus partner

## KEY TAKEAWAYS - Kite Lake Capital Management, a London-based hedge fund managing $3.9 billion in AUM, plans to launch its Diversified Credit Fund in Q4 2026, combining liquid global credit investments with convertible arbitrage strategies. - The new fund will be led by Damien Regnier, a Kite Lake partner who joined the firm in May 2026 from Tyrus Capital, where he headed the convertible bonds business. - Kite Lake's flagship fund delivered 18% returns in 2025 and has maintained a positive track record since inception, though its KL Special Opportunities Fund posted a 0.67% loss in September 2026, bringing year-to-date gains to 6.26%. - The launch capitalizes on sustained institutional investor demand for alternative credit strategies and reflects the firm's expansion beyond its core merger arbitrage and special situations franchises. ## DETAILED SUMMARY Kite Lake Capital Management is entering the credit-focused hedge fund market with the planned Q4 2026 launch of its Diversified Credit Fund, according to Bloomberg reporting on an investor note. The London-based manager, which oversees approximately $3.9 billion, aims to capture ongoing institutional appetite for alternative credit products by offering a strategy that blends liquid global credit investments with convertible arbitrage positioning. The fund's leadership reflects a deliberate recruitment strategy. Damien Regnier, brought aboard as a Kite Lake partner in May 2026, will lead the initiative. Regnier's hire from Tyrus Capital—where he held partner status and directed the firm's convertible bonds business—brings specialized expertise directly aligned with the new fund's mandate. His convertible bonds background provides institutional credibility in a strategy that requires sophisticated execution in both credit selection and relative-value positioning. Founded in 2011 by Massi Khadjenouri and Jan Lernout and co-managed by Jamie Sherman, Kite Lake operates across a diversified set of strategies including merger arbitrage, equity special situations, credit, and distressed debt. Performance metrics underscore the firm's track record: the flagship fund generated 18% returns in 2025 and has recorded no negative years since inception. However, the KL Special Opportunities Fund declined 0.67% in September 2026, ending the year with a 6.26% gain, indicating variability across strategy mandates. The new credit fund launch positions the firm to deepen its presence in liquid credit markets while leveraging Regnier's operational expertise to compete in a crowded alternative credit landscape. Kite Lake declined to comment on the launch details.