Alternative Market Briefing

Radcliffe launches Credit Opportunity Fund to take advantage of distressed opportunities in credit markets

Thursday, November 20, 2008

Radcliffe Capital Management, L.P., a suburban Philadelphia-based convertible manager, has raised $55 million to pursue the Credit Opportunity strategy to capitalize on the massive dislocations that have taken place in the global credit markets in recent months.

The Credit Opportunity Fund invests across the credit universe and is initially targeting short-term, fundamentally sound convertibles that offer attractive yields relative to other parts of a company’s capital structure and relative to high-yield, distressed, bank debt, and levered loans. The strategy, which uses minimal or no leverage and little or no shorting, is headed by Steve Katznelson who has managed credit-related portfolios since 1991. He will be assisted by Radcliffe’s team of 16.

“While every asset has been aggressively sold, the convert asset class has been the hardest hit due to the confluence of record redemptions, fund liquidations, forced deleverging from largely levered holders, and a widespread refusal of lenders to accept convertibles as collateral. This has created the opportunity to secure attractive, short-term unlevered returns from high quality credits in a way that is far superior to all other credit strategies”, states Katznelson.

The firm is currently in talks with a number of institutional investors and hopes to raise an additional $300 million by February of next year. Corporate website:......................

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