Deer Park Road’s flagship fund, STS Partners Fund, has closed to new investors.
The fund, which focuses on deeply discounted, short-duration, high cash-flow mortgage-backed (MBS) and other asset-backed (ABS) securities, was started in May 2008 with USD17m of internal capital and has since grown to more than USD600m.
Deer Park plans to roll-out a new fund early in the second quarter of 2013 that uses the same strategy and process employed in STS Partners Fund, but with securities that, for the most part, will be slightly higher in the capital structure and with slightly lower return expectations.
The new fund’s strategy will essentially replicate a strategy currently used by Deer Park to manage a USD150m-plus separately managed account.
Michael Craig-Scheckman, portfolio manager and owner of the firm, says: “In order to preserve the ample opportunity we continue to see in our market, near and longer term, we decided it was best to limit the size of the portfolio.”