Key Takeaways
- • Permal, the hedge fund investment arm of Legg Mason, is launching a $500 million vehicle, Permal Hedge Fund Opportunities, scheduled to start on 1 November 2008.
- • The vehicle will make discounted secondary market purchases of existing hedge fund interests from investors forced to sell to bypass withdrawal restrictions.
- • Permal says the fund is not a distressed debt fund and aims to provide a diversified portfolio for an enhanced risk/return profile.
- • Permal manages about $34 billion in assets, was founded in 1973, and was acquired by Legg Mason in 2005.
Summary
Permal, the hedge fund investment arm of US asset manager Legg Mason, plans to launch a $500 million vehicle designed to capitalize on distressed selling in the hedge fund secondary market. The fund, Permal Hedge Fund Opportunities, is scheduled to launch on 1 November 2008 and will make discounted secondary investments in existing hedge funds.
According to the Financial Times, as cited by the publisher, investors are selling hedge fund holdings at a discount to bypass withdrawal restrictions amid a broad demand for cash. Permal positions the vehicle as distinct from a distressed debt fund; instead, it intends to hold a diversified portfolio of such secondary interests, which it says will offer an enhanced risk/return profile for investors.
Isaac Souede, chairman of Permal Group, said the illiquid market had created extraordinary opportunities for long-term capital. He noted distressed buying opportunities in equities and bonds, and said the firm sees an unprecedented chance to invest with leading hedge fund managers at discounts to net asset values already depressed by market conditions.
Permal, with roughly $34 billion in assets under management, was established in 1973 and acquired by Legg Mason in 2005.
According to the Financial Times, as cited by the publisher, investors are selling hedge fund holdings at a discount to bypass withdrawal restrictions amid a broad demand for cash. Permal positions the vehicle as distinct from a distressed debt fund; instead, it intends to hold a diversified portfolio of such secondary interests, which it says will offer an enhanced risk/return profile for investors.
Isaac Souede, chairman of Permal Group, said the illiquid market had created extraordinary opportunities for long-term capital. He noted distressed buying opportunities in equities and bonds, and said the firm sees an unprecedented chance to invest with leading hedge fund managers at discounts to net asset values already depressed by market conditions.
Permal, with roughly $34 billion in assets under management, was established in 1973 and acquired by Legg Mason in 2005.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.