New Hedge Fund Solel Partners Starts Trading With $600 Million

(Bloomberg) -- Solel Partners, the hedge fund started by former Highfields Capital Management partners, began trading this week with $600 million, according to a person familiar with the matter.

Money managers Craig Peskin and Peter Fleiss count Highfields founder Jon Jacobson among their investors, as well as foundations, endowments and other high-net-worth individuals, said the person, who asked not to be identified because the matter is private. The value-oriented credit and equity fund started trading Tuesday from Boston.

The pair declined to comment.

The startup comes amid a challenging fundraising climate for new funds, with 289 launched in the first half, the slowest start to a year in at least a decade, according to Hedge Fund Research Inc. Solel is one of the biggest debuts this year, following the $2 billion Woodline Partners launch in August and the $1 billion raised by Cinctive Capital Management last month.

Still, the prime brokerage unit at Goldman Sachs Group Inc. expects about $10 billion to be raised by new funds in 2019, in line with the post-financial crisis average.

Peskin and Fleiss first worked together at Blackstone Group Inc. Peskin joined Highfields in 2004, and Fleiss followed in 2007. Last year, Jacobson decided to return client money after two decades in business, joining a growing list of big-name managers who have left the industry in the past three years. The firm, which managed $12.1 billion at the time, had posted annualized 10.2% returns and lost money in just two years, 2002 and 2008.

In announcing the closure, Jacobson told investors “undoubtedly, there will be Highfields offspring in the near future, and I will be supportive of them with both my time and my capital.” He declined to comment for this story.

Former Highfields analysts Robert Sigman, Noah Kolatch and Robin Hollenstein have also joined the firm to help Peskin and Fleiss identify investments across the consumer, financial, retail, business service, real estate, technology and health-care sectors. The firm will hold eight to 12 core long positions, in addition to making short wagers.

To contact the reporter on this story: Katia Porzecanski in New York at kporzecansk1@bloomberg.net

To contact the editors responsible for this story: Alan Mirabella at amirabella@bloomberg.net, Josh Friedman, Melissa Karsh

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