Marathon Asset Management has gained a reputation for being a rag-and-bone picker, finding opportunities in the aftermath of financial disaster.
Marathon, a $11 billion hedge fund, is going scavenging in Europe with a new fund dedicated to distressed debt on the Continent, hoping to profit from improving economic prospects in the region.
The $530 million fund was opened on Jan. 15 and will start with investments in Spain, Germany and Ireland, according to someone familiar with the fund’s strategy.
The move comes as European banks continue to offload unwanted assets amid a new regulatory landscape that has required banks to hold more cash on their balance sheets. It also follows a handful of hedge funds and private equity firms that piled into the region last year.
The private equity firms Apollo Global Management and the Blackstone Group have been fighting over assets in Spain, while hedge funds like John Paulson’s Paulson & Company and Daniel Loeb’s Third Point have been circling assets in Greece.
“The recovery and stabilization of European sovereign credits, financial institutions and its economy dovetails with bank deleveraging and asset sales which is taking place,” said Andrew Rabinowitz, chief operating officer at Marathon.
Marathon plans to buy nonperforming loans from local banks, distressed real estate loans and mortgage-backed securities. It is the hedge fund’s second Europe-focused portfolio: it opened its first Europe fund in 2011 with $1 billion in assets.
That first Europe fund returned 22 percent to investors in its first year and 11 percent last year.