Veteran credit team kickstarts new Rhodium European-focused launch

November 28, 2013  

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  Iftikhar Ali
  Jeffrey Tirman
Experienced credit trader and portfolio manager Iftikhar Ali has gone live with a novel new hedge fund entrant to the ever-growing European credit arena, with the launch of London-based Rhodium Capital.

Ali – who has previously worked during his 20-year career as a proprietary trader at top US banks and as a fund manager with several leading hedge funds, and who is the firm’s CIO – has co-founded Rhodium together with CEO and chief risk officer Jeffrey Tirman.

Tirman has also worked in the credit markets for more than two decades. He formerly founded and ran for 16 years his own credit-focused hedge fund firm Talisman Capital, and he also has extensive experience and contacts in the investment banking and asset management worlds.

Both men are well-connected in the credit space and are significant investors in the newly-launched Rhodium Global Credit Fund – which went live at the start of November with initial capital of $30 million and is one of the first new European hedge funds to be fully compliant with all aspects of the new AIFMD requirements.

Rhodium’s multi-strategy approach to credit draws on Ali’s experience both as a prop trader – where he worked for several years as head of CDS trading at Salomon/Citi in the early growth years of the development of the European credit and derivatives markets, and then as head of international credit prop trading at Bank of America – and more recently in the hedge fund world.

Having left BofA in 2009 – after overseeing a highly profitable operation for the bank during the credit market meltdown in 2008 – Ali joined Moore spin-out James Caird Asset Management as a portfolio manager for European investment grade and emerging market credit.

He then moved to the London operation of Izzy Englander’s US-based Millennium Management, where he ran a global credit portfolio, before most recently managing an EM credit portfolio at Observatory – the long-running London-based credit firm that is now part of the Stockholm-headquartered Brummer & Partners multi-strategy hedge fund group.

Ali is supported on the investment side by experienced quantitative and risk modelling expert Yash Ganeshan – who previously worked in Ali’s prop trading team at BofA – and by another analyst who will join the team early in 2014 from a major investment firm.

On the operations and business management side, Tirman is supported by Rhys Pitt – who formerly spent eight years at Citi Capital Advisors, the bank’s hedge fund operation that recently span out as the independent Napier Global Capital firm, and who also previously worked at Goldman Sachs for three years – as vice president of operations and finance. Another recruit on the ops side will also join shortly.

Over his long career in the credit markets, Ali is understood to have generated a stellar track record with his evolving credit strategy – achieving an annualised return of some 16% during the highly turbulent last eight years in the markets, and with a Sharpe ratio in excess of 2.

He is believed to have made money in both 2008 and 2011, and has a strong history of protecting capital through difficult periods as well as maximising returns when conditions have been more favourable.

A shadow portfolio that the team have been running since July is said to have generated returns of almost 10% in the four months to the end of October, net of all expenses other than incentive fees.

The strategy is fundamentally-driven – spanning fundamental value credit positions and more opportunistic long/short credit trading together with relative value, capital structure arbitrage, CDS spread arbitrage and event-related trades.

But the portfolio also combines a unique quantitative overlay that is designed to protect the fund from unwanted macro/external risks and isolate the desired risk/return characteristics of the portfolio.

Although strongly rooted in European credit, Rhodium’s investment approach will take a more global opportunistic approach in terms of primary market credit activity, including areas such as the Middle East and Asia.

Having opted against any kind of seeding deal, Rhodium’s initial investor base comprises a diverse range of institutions and individuals – while there is also the facility to run segregated managed accounts for investors, so long as they are managed pari passu with the core fund strategy.

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