FrontPoint has amassed over $1 billion in commitments for a new direct-lending fund, MarketWatch reports.It’s the biggets launch ever for the hedge fund, which is interesting since it’s been battling with insider trading allegations since last year.
The new fund is called FrontPoint-SJC Direct Lending Fund and will be headed up by Stephen Czech (photo to your right), who joined FrontPoint last year.
Czech was a Managing Director and Portfolio Manager at Gottex Fund Management, before which he founded Contrarian Capital Finance and was head of the Mezzanine Finance Group at Credit Suisse.
Hoping to cash in on a void left by banks and other major lenders who have been tight on the lending front since 2008, the fund will make secured loans to middle-market companies in the U.S that “generate annual revenue of $75 million to $500 million and annual earnings before interest, taxes, depreciation and amortization of $7.5 million to $50 million,” according to MarketWatch.
They’ve already begun lending.
40% of SJC’s funds come from existing clients, who clearly have not been deterred from investing despite the fact FrontPoint shuttered one of its portfolios in December due to fraud speculation, and also laid off 27 employees.
It took nine months to accumulate the $1 billion cash pile and hedge fund’s co-CEO Dan Waters told MarketWatch that the scandal “definitely had an impact, but fortunately it did not prevent us from reaching our goal.”
He says they had to answer a lot of questions related to the accusations, which involved health care portfolio manager Chip Skowron.