Investment firm Reservoir Capital Group agreed to buy a “significant portion” of the assets of troubled hedge fund group Ritchie Capital Management in a debt and equity deal worth $1 billion, Reuters has reported.
The deal creates a new entity called Rhone Holdings LP, which will purchase certain assets of the Chicago-based hedge fund’s flagship fund in part with capital invested by Reservoir. Rhone will be managed by Ritchie Capital.
The Ritchie Multi-Strategy Fund, Ritchie’s flagship fund, has faced investor demands for capital return amid declining performance in the last 18 months. The deal was approved by investors and will allow some investors be paid back.