April 2, 2015 / 3:21 PM / 5 years ago

UPDATE 1-Ex-Cheyne partner Massoud readies own hedge fund for Q3 launch- sources

* Michel Massoud co-managed Cheyne’s event-driven fund

* To launch with start-up capital of about $100 mln

* Follows strong start to the year for launches (Adds details, background)

By Nishant Kumar and Simon Jessop

LONDON, April 2 (Reuters) - Former partner at hedge fund Cheyne Capital, Michel Massoud, is preparing to launch his own hedge fund in the third quarter of 2015 to bet on corporate events such as mergers and acquisitions, three sources told Reuters.

Massoud, who co-managed Cheyne Capital’s event-driven fund, left the London-based hedge fund last year after more than nine years at the firm that manages about $6 billion in assets.

The launch comes as the pace of start-ups by high profile fund managers increases in Europe and mergers and acquisitions this year reach their highest first-quarter level since 2007.

Companies around the world announced deals worth a total of $811.8 billion in the first quarter, up 21 percent year-on-year, on the back of slightly fewer but bigger deals, according to preliminary Thomson Reuters data.

Massoud, who spent nearly six years at Morgan Stanley before joining Cheyne, is setting up Melqart Asset Management in London and will launch a fund similar to the one he helped manage at his previous firm, the sources said.

He plans to launch with a start-up capital of about $100 million, the sources said.

An email to Massoud remained unanswered.

Event-driven hedge funds returned just 2 percent in 2014, according to data from industry tracker Eurekahedge, as a number of fund managers were caught out by more than 500 corporate deals globally failing last year.

But a survey earlier this year by Deutsche Bank’s prime brokerage unit that services hedge funds found that investors expected event-driven strategy to be the best performing hedge fund strategy in 2015 and 84 percent of them were planning to retain or increase allocation to such funds.

Some of the other prominent hedge fund launches this year include a fund by former Lansdowne Partners partner Stephen Kirk, former Brevan Howard trader Chris Rokos, who is preparing to launch a macro hedge fund, and former global head of foreign exchange at Citigroup, Anil Prasad, who has set up Silver Ridge Asset Management in London. (Editing by Vincent Baby)

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