Coons has 21 years direct experience investing, having been a founding senior trader of high yield and distressed at both Morgan Stanley and Goldman Sachs. Most recently, he was head of High Yield Investing at the U.S. Trust division of Charles Schwab and Co, where he employed these strategies in a long only, public format for the past three years.

The event driven fund employs a strategy of investing in distressed fixed income securities sold into the market for non-economic reasons and well below their true economic value.

Coons said that the traditional high yield bond market is overwhelmingly driven by flows of funds in and out of the market, and arbitrary rating assignments which skew bonds and debt into valuations well below and sometimes above their true intrinsic value.

The new Fund will employ short techniques at the opportunistic occasion that this occurs. The Fund seeks total return from both current yield and principal appreciation.

During his sell side trading career, Coons worked alongside as a peer other notable hedge fund investors David Tepper of Appaloosa, Jonathan Kolatch of Redwood, Alan Cohen of York Capital, and  David Matlin of Matlin Patterson.

Coons is leading a team of analysts with in excess of 70 years experience in distressed and high yield investing. The team  includes David E. Erb (23 years experience in fixed income) and Joel W. Miller (30 years experience).. 

The Fund is designed to deliver consistent monthly returns regardless of market conditions, with low volatility, and low correlation to traditional stock and bond markets.

The Fund's performance has an annual absolute return objective of 12-15%, after all fees.

Copyright Hedgeweek 2003