A new hedge fund, MeehanCombs LP, has launched in Greenwich, Connecticut. Its founding partners are Eli Combs, president of the firm, Matt Meehan, CIO and portfolio manager, and Jim Plohg, COO and General Counsel. The firm will focus on investing in global credit opportunities with a particular emphasis on Europe; understandable given the cheap valuations that have arisen out of the ashes of last year’s eurozone crisis.
Combs told Hedgeweek via email that this was not “a hypothetical strategy. It has been proven and tested. Matt Meehan has been investing for 30 years and his nine years’ experience managing Eos’ credit strategies allowed him to build the relationships you need if you want to be able to capitalise on opportunities in the European credit markets.”
The strategy will look to build long and short credit positions and leverage Meehan’s ability to invest across capital structures in both the US and Europe, which has seen him generate net annualised returns of “low double digits” according to Combs, over the last 10 years.
Meehan was formally the portfolio manager of credit strategies between 2002 and 2011 and of Eos’ Credit Opportunities Funds from their inception in 2004 until 2011. Combs leaves Alden Global Capital where he was one of the founding members, where Plohg, also a founding member of Alden, served as its chief compliance officer and General Counsel.
The new firm has selected Goldman Sachs as its independent administrator and whilst Combs admits that the fund could start trading now if necessary “we are spending time talking to potential additions to our team”. Sources familiar with the launch said that MeehanCombs is expected to grow its team to between 10 and 15 people by the time it expects to start trading in the third quarter.
Combs told Hedgeweek that central to the firm’s philosophy is that there are opportunities to generate consistent, attractive returns as a credit investor “if you have the expertise to be flexible with regard to geographic exposure and where to target in capital structures. We also believe that it is essential to have a consistent short book and to be comfortable holding cash when it’s logical. Credit markets, like other markets, dislocate regularly and shorting helps protect your downside in these dislocations.”
Being one of the founders of Alden Global Capital it was obviously a big decision for Combs to leave, having worked side-by-side with Randy Smith – the firm’s other founder – for over four years and building it into a successful firm running USD2.5billion in assets. Combs said that in his next role he wanted to build a “first class sustainable business” with compelling return opportunities, noting that over the last 12 months his primary focus when writing Alden’s investment letters to clients has been on the “great opportunities brewing in Europe”.
“I think it will be by far the best source of opportunities over the next five years,” opined Combs. “To be clear, this is not a Europe-only portfolio, but I believe the opportunities in Europe will be the icing on our global cake.”