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Alternative Market Briefing

Intimate understanding of a company’s structure allows Akanthos’s Kao to be opportunistic

Tuesday, June 18, 2013

By Beverly Chandler, Opalesque London:

The Opalesque 2013 West Coast Roundtable, sponsored by Sunrise Capital, the The California Hedge Fund Association, Eurex and Taussig Capital saw Michael Kao, founder and chief executive officer with Akanthos Capital Management, based in Los Angeles explain how he achieves option-like payoffs in capital structure long/short trades.

Kao founded Akanthos in 2002 and the firm is a capital structure long/short fund with an event bias with some $110m under management, about 45% of which are Kao’s own funds. Kao explained: "When I said we do capital structure long/short with an event bias, the first part of that description means that we are bottom-up fundamental investors across the capital structure, viewing the capital structure as a continuum of components with different risk/reward characteristics. Our aim is to structure the overall portfolio as a collection of thematically diverse, asymmetric payoffs by creatively combining disparate pieces of the puzzle, so to speak. More often than not, we are looking for catalysts to unlock the opt......................

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