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January 11, 2019  

Buy-Side Team Breaking With Credit Suisse

The managers of a $2.5 billion hedge fund are spinning off from Credit Suisse Asset Management.

The group, led by Albert Sohn, is retaining control of the $2.5 billion SPF Securitized Products Fund — doing business through a newly formed firm called SPF Investment. The vehicle is expected to change hands during the first quarter.

In exchange, Credit Suisse Asset Management will receive payments equal to no more than 25% of SPF’s revenues for at least five years. The installments will shrink over the course of the agreement, according to a Nov. 9 SEC filing in which SPF reported no assets.

The SPF fund invests in a range of structured products, including asset-backed securities, mortgage bonds and collateralized loan obligations. Sohn set it up in 2012 with $500 million of initial capital from Credit Suisse.

Sohn resigned from Credit Suisse on Dec. 31. But he and his team still are working out of the bank’s New York office.

Sohn owns the largest stake in SPF. The rest is held by Gary Buchalter, Cory DeForrest, James Drvostep, Suraj Sujanani and Alok Verma, who left longtime posts at Credit Suisse the same day.

Also coming to SPF from Credit Suisse were chief operating officer Mark Barres, chief financial officer Sean Keating and portfolio manager Eric Zhai. General counsel Christopher Marvin signed on from New York Life.

Sohn had been on board at Credit Suisse since 1996, and in 2011 became head of structured-product structuring, sales and trading. With the formation of the SPF fund the following year, he helped orchestrate the hiring of numerous personnel from Barclays — including Jay Kim, who today handles many of his former underwriting duties.

Later, former Credit Suisse Asset Management chief executive Robert Jain implored the operation’s top portfolio managers to remain on board despite Volcker Rule limitations on the internal capital they could run. But Jain left in June 2016 to become co-chief investment officer at Izzy Englander’s Millennium Management.

SPF’s spinoff, in turn, follows similar moves at other institutions. For example, HPS Investment spun off from J.P. Morgan’s Highbridge Capital in 2017. And Napier Park Global separated from Citigroup in 2013.

Credit Suisse Asset Management was running $66.8 billion of gross assets a year ago. Included in that total is a series of CLOs issued by a team that remains at the company.