| BOSTON, March 15
BOSTON, March 15 David Russekoff, who engineered
some of hedge fund Perry Capital's most profitable trades, has
launched his own firm and expects to take in outside money in
the coming months, two people familiar with his plan said.
Smith Cove Capital began trading with less than $100 million
of partner capital earlier this month, making concentrated bets
on distressed securities, buying both equity and debt, the
people said. The fund is eyeing investments in the energy
sector, sovereign debt and European telecommunications,
financial and media companies, the people added.
During 13 years at Perry Capital, Russekoff helped build a
position against the overheated housing market in 2006 to 2007
which earned the firm some $2 billion. In 2010 he worked on how
to play the housing market recovery through bets on mortgage
companies Fannie Mae and Freddie Mac.
He was the company's chief investment officer when he left
the firm in 2015 with plans to eventually start his own fund.
At its peak Perry Capital invested $15 billion and took on
Greece and Argentina over their defaulted bonds. Last year,
Perry closed after having returned an average 10 percent a year
over its 28-year life.
"Dave has shown an ability to manage risk properly while
also having the ability to take big risks when necessary," said
Kyle Bass, who runs hedge fund Hayman Capital and has known
Russekoff for years. "He has the ability to go both long and
At Smith Cove, headquartered in Greenwich but named after an
anchorage area in Long Island Sound, Russekoff reunites with
former colleague, Bob Carroll, who is now his head trader. Roger
Schmitz, who used to work at Monarch Alternative Capital, and
Victor Consoli, who previously worked with Perella Weinberg
Partners, round out the investment team.
As Russekoff sets out, raising money for hedge funds has
become increasingly difficult at a time many pensions are paring
back allocations amid concerns over high fees and low returns.
He will be launching at the same time a trio of prominent
spin outs including Francis Cueto's Asturias Capital, Ben
Melkman's Light Sky Macro and Brandon Haley's Holocene Advisors
are also raising money.
Mark Doherty, managing principal at consultant PivotalPath,
said Russekoff may have some time to build up a track record
with his new team. "He has working capital and has been able to
attract senior talent which gives him a better chance of
(Reporting by Svea Herbst-Bayliss; Editing by Frances Kerry)