Kirkoswald to launch emerging-markets credit fund

Kirkoswald Asset Management is preparing to launch a standalone hedge fund focused on emerging-markets credit that will be managed by the team led by Giorgio Lombardo, according to people familiar with the plans who asked not to be identified. Founder Greg Coffey will not be involved in day-to-day management of the new vehicle.

The London-based firm, which oversees about $20 billion in assets, is separating the emerging-markets credit strategy from one of its existing funds. The new vehicle is expected to begin trading next year and will adopt a more directional investment approach, with a primary focus on high-yield sovereign debt in selected emerging markets.

The dedicated fund will be run by the former Emso Asset Management team led by Lombardo. The separation of the strategy into a standalone fund is intended to provide the group with a distinct mandate and an independent operational structure, the people said.

Greg Coffey, who founded Kirkoswald and built a reputation in macro and emerging-markets investing, will step back from direct management of the proposed fund. The vehicle will operate independently of Coffey’s direct investment role at the firm.

Details on target size, fee structure and investor base have not been disclosed. Kirkoswald and the managers are completing preparatory steps ahead of a launch next year, with final terms and a public announcement still to be set.

Kirkoswald has not publicly announced the launch and declined to comment when approached. The people who provided details requested anonymity because the strategy has not been officially revealed.

Background: Coffey founded Kirkoswald after earlier success in macro and emerging-markets investing. Several members of the team that left Emso Asset Management are reported to have joined Lombardo in the new effort at Kirkoswald.