October 2, 2014 / 3:30 PM / 5 years ago

Candlewood offers new Puerto Rico-oriented hedge fund

BOSTON, Oct 2 (Reuters) - Candlewood Investment Group is offering a new hedge fund that will invest in Puerto Rico’s distressed debt market, according to marketing materials sent to prospective clients and reviewed by Reuters.

The New York-based firm, which manages $2.9 billion in assets, said Puerto Rican debt was offering attractive yields compared with comparable U.S. debt.

The new fund will focus on selecting securities issued by the Puerto Rican government and public corporations. It may also include infrastructure bonds backed by rum taxes and municipal finance bonds backed by a pool of municipalities’ general obligation bonds.

Candlewood, which was spun out of Credit Suisse several years ago, says it gained expertise in Puerto Rico by selecting distressed muni bonds for its Special Situations fund and has done extensive research on the island since 2012.

The minimum investment to get into the new fund will be $250,000. Clients will pay a 1.25 percent management fee plus a 15 percent incentive fee, less than what many other hedge funds are charging. (Reporting by Svea Herbst-Bayliss; Editing by Lisa Von Ahn)

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