WhiteBox Duo Plans to Launch New Event-Driven Distressed Debt Fund

(Bloomberg) -- Whitebox Advisors LLC colleagues Cindy Delano and Amit Patel have teamed up to form a hedge fund focused on event-driven and special situations that could arise as credit markets tighten.

Invictus Global Management, based in Austin, Texas, is launching its first $500 million alternative-asset portfolio to invest in distressed credit, bankruptcy trade claims and litigation finance, according to a document reviewed by Bloomberg. Delano and Patel will serve as co-chief investment officers.

WhiteBox Duo Plans to Launch New Event-Driven Distressed Debt Fund

Some of the biggest distressed-debt specialists have had a tough time showing a profit, with defaults hovering near all-time lows, because troubled companies can take advantage of wide-open credit markets, low interest rates and easy terms. Delano and Patel are betting this won’t last much longer.

“As our maturing economic cycle intersects with a tightening of central banking policies and an increasingly unbalanced global growth picture, we are seeing the onset of credit quality deterioration and amplified distress amongst non-investment grade issuers,” which will lead to “attractive opportunities,” the firm said in the document.

Delano and Patel spent the past three years working together on the credit investing team at Whitebox Advisors, a multi-strategy hedge fund manager. They handled positions in distressed credit, post-reorganization equity, litigation finance and trade claims, and were involved in restructuring cases for Puerto Rico, Caesars Entertainment, Westinghouse Electric Co. and Sears Holdings Corp., according to the document.

Track Records

Delano, 40, was previously a partner at restructuring law firm Kirkland & Ellis LLP, and associate general counsel at AIG Investments, before she started as a legal analyst at WhiteBox, according to her LinkedIn profile. Delano also worked at Kirkland & Ellis, Weil, Gotshal & Manges LLP and Milbank LLP, according to the document. Patel, 38, held positions at Avenue Capital and Wellspring Capital Management LLC.

In addition to Patel and Delano, the firm’s third founding partner is Aaron Goldberg, who will serve as chief operating officer. Goldberg has spent more than three decades in the alternative asset management industry at firms such as Halcyon Capital Management and BlueMountain Capital Management. 

Despite the drought in distressed debt, alternative-asset managers are still able to attract sizable sums of new money. Alp Ercil, one of Asia’s biggest specialists in the field, raised $1.6 billion for a new fund, Bloomberg reported in February. Ercil, who runs Asia Research & Capital Management Ltd., amassed the sum in just one round over the course of a few months.

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