Veteran hedge fund manager Richard Perry is making a return to the industry, nearly a decade after closing Perry Capital in 2016, with the 70-year-old joining distressed credit specialist Olympus Peak Management as a partner, according to a report by Bloomberg.

The report cites unnamed sources familiar with the matter as revealing the return of the former Goldman Sachs merger arbitrage specialist, who founded Perry Capital in 1988 and built it into a $15bn fund at its peak. After three consecutive years of losses and client outflows, he shut down the firm but expressed hope that his legacy would continue.

Now, Perry is teaming up with Olympus Peak founder Todd Westhus – a former Perry Capital executive – and Matt Englehardt, another long-time colleague, to launch a new distressed credit fund. The trio are raising up to $500m, with plans to co-manage the investment committee.

Westhus, who launched Olympus Peak in 2018, was instrumental in some of Perry Capital’s most successful trades, including: a $2bn profit from shorting subprime mortgages during the 2008 financial crisis; a $600m gain on Argentine bonds; and successful bets on Fannie Mae and Freddie Mac securities in 2010.

At Olympus Peak, Westhus has continued that success, profiting from the bankruptcies of Latam Airlines, crypto exchange FTX, and PG&E. The firm’s trade claims fund, launched in 2021, has generated low double-digit net returns, with a win rate exceeding 90%, sources said.