New York-based investment management firm Fir Tree closed Fir Tree Mortgage Opportunity Fund (“MOF”), a limited term opportunity fund that totals around $400 million in capital and commitments.
Fir Tree aims to deploy the capital broadly across the mortgage opportunity set. This includes senior, high quality mortgage securities, structured products, and other areas related to the the U.S. mortgage market's fallout.
Fir Tree launched MOF in July 2008 to offer dedicated exposure to opportunities resulting from the collapse of the housing and related structured products markets.
According to a release from the firm, the terms of the fund allow Fir Tree to call capital from limited partner commitments as the managers identify investment opportunities.
Additionally, limited partners have agreed to a multi-year lock-up of their capital to allow Fir Tree to execute its investment strategy via the current credit market cycle.
With the closing of MOF, Fir Tree now manages more than $4 billion. Since its founding in 1994, the firm has pursued an opportunistic and value oriented approach by investing in both equity and credit markets.
“As patient investors, we wanted to structure the Mortgage Opportunity Fund so that we could properly optimize our LP’s capital in 2009,” said Andrew Fredman, Fir Tree managing partner. “Our decision to maintain a cautious approach in 2008 allowed us to take full advantage of the opportunities unfolding in 2009.”
“Our differentiated and diversified investment strategy has allowed our fund to establish scalable positions across the spectrum of RMBS assets," Clinton Biondo, managing director said. "Time will be our friend as market fundamentals return in the medium to long term and we capture full value from a carefully-managed portfolio.”
“In what is regarded as the most difficult market environment in decades, we are pleased with MOF’s initial performance and are extraordinarily grateful for the support of many of our long standing limited partners and a select group of new institutional partners," said Jim Walker, managing partner. "We look forward to building upon MOF’s early success and delivering attractive long term risk adjusted returns.”