Major Leaguers Catch Hedge Fund Fever

Date: Tuesday, October 16, 2007
Author: HFN Daily Report

You can look it up: a new hedge fund is boasting a customer list like a veritable all-star Major League Baseball roster.

The Miami fund has so far penciled Jose Contreras, Orlando Hernandez, Jorge Posada and Alfonso Soriano-each a Latino big league star-into its lineup in an attempt to raise $60 million in investor capital.

How about that?

The fund is run by onetime Merrill Lynch personnel Juan Collar and Anthony Fernandez. According to its regulatory filing, the Miami fund has $12 million under management at present.

Contreras, Hernandez Posada and Soriano are each listed as a "beneficial owner" of the fund, meaning each would have a 10% stake in the partnership valued at $6 million apiece.

A report said the fund is focused on fixed income and profited from the collapse of subprime mortgage. Collar and Fernandez went into business together in 2005, and manage a total of $54 million, according to their filing.

For an asset class known for its million-dollar investment minimum, professional baseball is fertile ground for clientele-salary cap or no.

Contreras, a pitcher for the Chicago White Sox, will earn $9 million this year. Hernandez, a pitcher for the New York Mets, will get $5 million. New York Yankees catcher Posada will get $12 million. Soriano signed an eight-year $136 million contract with the Chicago Cubs last year.

The fund is said to consider professional baseball its niche client demographic.