Evolution Said to Hire Golden State Team for New Fund

Date: Thursday, October 1, 2009
Author: Tomoko Yamazaki, Bloomberg

Evolution Capital Management LLC, a U.S.-based hedge fund specializing in Asian equities, has hired a team of managers from Golden State Asset Management, according to a letter to investors, as it starts a new U.S.-focused fund.

A group including JT Hansen, Steve Pigott and Shaun Sparkman joined in September, according to a letter sent to investors dated Sept. 24 and obtained by Bloomberg News. The new fund, set to start this year, will employ relative-value methods that take advantage of mismatches in the price of various securities, and will be Evolution’s first U.S.-focused fund.

Recovery in the capital markets this year has prompted managers to start funds after hedge funds globally posted their worst year on record in 2008. About 300 funds have started this year through August, while the rate of closures slowed, with 200 of them shutting since the end of the first quarter, compared with about 600 throughout the fourth quarter of 2008 and first quarter of this year, according to Eurekahedge Pte.

Evolution, founded by Michael Lerch, manages more than $400 million in alternative assets for institutional clients, with funds that primarily focus on equity and equity-related strategies in Asia, according to the company.

The new fund will invest in credit and will also employ so- called event-driven strategies, which involve investing in companies such as those going through mergers and acquisitions, as well as volatility, the letter said.

Willie Alford II, managing director at Evolution, declined to comment on the details of the fund, saying it’s company policy not to talk to the media on their investments. Hansen, who formed Golden State this year with others including Pigott and Sparkman, couldn’t be reached for comment.

Pequot, Zazove

Prior to Golden State, Hansen was a fund manager for Stark Investments and Susquehanna International Group, the letter said. Former stints for Pigott include running an event-driven hedge fund at Citadel Investment Group LLC and Pequot Capital Management Inc., while Sparkman was previously a credit portfolio manager for Bank of America Corp. and a fund manager and a partner with Zazove Associates, the letter said.

Neither Sparkman nor Pigott were immediately available for comment. Golden State didn’t return a call seeking comment.

A rebound in global stock markets this year has helped hedge funds record their best first eight months since 2000, according to Singapore-based Eurekahedge. Hedge-fund assets increased by $21.4 billion in August, growing for a fourth straight month, the data provider said.

Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets, bet on falling as well as rising asset prices and participate substantially in profits from money invested.

To contact the reporter on this story: Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net