June 6, 2018 / 8:48 AM / in 17 days

U.S. hedge fund Hudson Bay to open London office - sources

LONDON (Reuters) - U.S. hedge fund Hudson Bay Capital is opening an office in Britain to expand its European trading book, two sources told Reuters on Tuesday.

Hudson Bay, which runs $2.8 billion in assets across equity, credit and other assets, has hired a team of three for its new London base and plans to add more staff, the sources with direct knowledge of the matter said.

Other U.S. hedge funds are have also increased investment in Europe, including high-profile activists such as Elliott Advisers, amid increased competition and less attractive valuations at home.

Elliott had its most active first quarter in Europe in at least five years, and more than 211 U.S.-based hedge funds already have British bases, Preqin data showed.

Britain continues to be a popular destination for U.S. hedge funds seeking to trade financial products in Europe in spite of its upcoming exit from the European Union.

“I think (Hudson Bay), along with many others, still see London as the European financial centre and the people they want to hire want to live here,” said one of the sources.

Founded in 2005 and led by Sander Gerber, Hudson Bay’s stakes include TripAdvisor (TRIP.O), Madrigal Pharmaceuticals (MDGL.O) and Tiffany & Co (TIF.N), Thomson Reuters data showed.

Its main fund, the Hudson Bay International Fund, was up 4.4 percent in the year to end-May, one source said.

EVENT DRIVEN

Hudson Bay has hired two ex-Pine River Capital traders, including Evan Pearce, who was previously head of European credit, three sources told Reuters.

Pearce, who joined as a portfolio manager, previously held roles at Pictet Asset Management and Edoma Partners, filings disclosed to Britain’s financial markets regulator show.

Two of the sources said Hudson Bay had also hired Paul Godfrey, formerly of Pine River Capital, and Paul Murrell, who worked at Pinyon Asset Management and Sandell Asset Management.

Godfrey joined as a portfolio manager to run the European event-driven portfolio, and Murrell as a senior analyst reporting to Godfrey, one of the sources said.

Event-driven strategies bet on mergers and acquisitions and other so-called special situations, which include events such as corporate restructurings, litigation or activism.

One of the sources said the New York based firm, which says it employs 74 people, including 38 professionals involved in investment and risk, has more hirings planned.

The London employees will be trading under platform provider Mirabella Financial Services, the British filings showed.

Platform providers have become increasingly popular either as a permanent solution to offset the steep costs associated with full authorisation or as a temporary step while a hedge fund awaits approval from the UK regulator.

Reporting by Maiya Keidan; editing by Simon Jessop and Alexander Smith

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