In 1995, Eric Keiter founded a little hedge fund called MKP Capital Management. Eleven years later, the firm’s middle initial left to take a few years off, and in his absence MKP grew to manage some $24 billion.
Still, you can’t keep an entrepreneur down for long, so Keiter took all of his global macro fixed-income expertise and started… a livery-cab leasing company.
Now, however, Keiter appears to have tired of the black-car biz. Perhaps doesn’t like lime green. Perhaps he’s afraid of what mayor-elect-elect Che de Blasio plans to do with the TLC. Perhaps he’s just got the investing bug again. Whatever it is, he’s back with an unfortunately-named new closed-end fund shop, Shadow Tree Capital.
The plan is for the New York firm to launch a series of closed-end funds focused on investments in non-bank financing, including consumer debt and loans to small and mid-size businesses.
The first vehicle, dubbed Shadow Tree Income Fund, would be aimed at U.S. investors. It is expected to hit the capital-raising circuit on Oct. 1 with the goal of attracting $15 million to $25 million for a final close next April or thereabouts. A second offering directed at limited partners in Europe would follow.
The funds would pursue loans with maturities of two months to two years, while holding their capital for 3-4 years. Investors would pay fees equal to 1.25% of assets and 20% of profits, subject to a 6% hurdle….
Another New York Livery principal, Samuel Gradess, is leaving with Keiter to become one of Shadow Tree’s two other partners. Shadow Tree’s third owner is described as currently serving as an advisor to a large bank’s hedge fund operation, which he is expected to leave soon. All three partners will work on investments and marketing, with the unnamed third individual leading the shop’s capital-raising efforts.
MKP Co-Founder Starts New Fund Operation [Hedge Fund Alert]