Waterstone Capital Management expects to be managing over $100 million by 1 September following the launch of its convertible and capital structure arbitrage-focused fund on 1 August 2003.
The fund is managed by Shawn Bergerson, who was chief investment officer for Deephaven Capital Management's multi-strategy Market Neutral Fund and also the portfolio manager of Deephaven's U.S. Convertible Arbitrage Fund. Mr. Bergerson left Deephaven in January after four years of managing the convertible fund.
Bergerson's strategy is to evaluate the markets for credit, equities, volatility and convertibles to choose securities with the best risk-adjusted source of return. The primary driver to the investment strategy is relative valuation, incorporating fundamental analysis, quantitative models, scenario analysis and past experience.
Waterstone currently has 7 employees. Also joining Mr. Bergerson is former Deephaven Operations Manager, Martin Kalish, who is now Waterstone's chief financial officer and investor contact, as well as Jean Smith, who was previously equity trader for Deephaven's convertible desk.
The fund's prime brokers are Deutsche Bank and Goldman Sachs & Co; GlobeOp Financial Services is the administrator and service provider for the fund's middle and back office; Seward & Kissel LLP is legal counsel; and Ernst & Young is the auditor.