Wednesday, February 11, 2009

Paging Lazard: Aladdin Capital For All Your DIP Needs

Realizing there is an unmet need for DIP and rescue financing as well as for more oddly named hedge funds, Aladdin Capital has recently launched a Debtor-In-Possession only fund. The Stamford fund, which claims to be avoiding the current Treasury bubble, yet which in January sacked virtually all people in its structured bond business (CLO and Loan obligation desk), likely the biggest bubble over the past decade, hopes to be on the leading edge of the next bubble, this one in super senior bankruptcy lending. The logic goes that as nobody, not even Goldman is willing to let the L+1000 DIP Genie loose, this should make for a terrific niche. Of course the logic does ignore the fact that even with DIPs, most bankruptcies will imminently lead to liquidations (how many Sharper Image massage chairs does one honestly need).

But we are not ones to rain on their parade. Says Neal Neilinger, vice chairman and CIO of Aladdin:

"This provides a tremendous opportunity to capture meaningful market share. The
DIP fund will participate, structure and lend directly into both large-cap and
mid-cap facilities."
So for all those who believe in a magic carper ride over the credit market bottom, and have a necrophiliac fascination with DIP lending and extracting 20% before an existing DIP has to be primed by yet another DIP (see Delphi), please send your resumes to Aladdin credit fund managers Victor Russo and Luke Gosselin.
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Anonymous said...

beauty ... i want in
gordo geko