(Updates with assets Lumsden managed in seventh paragraph.)
Sept. 9 (Bloomberg) -- Alistair Lumsden, who stepped down as head of a $2.3 billion hedge fund focused on asset-backed securities at CQS U.K. LLP last year, is starting his own firm, said a person with knowledge of the matter.
Lumsden, 44, plans to start trading at his London-based East Lodge Capital Partners LLP next year, said the person, who asked not to be identified because the firm is private. The company will trade European and U.S. credit with a focus on corporate bonds and structured debt, said the person.
The CQS ABS Fund, which invests in bonds tied to mortgages, credit-card loans and student debt, gained about 28 percent on average a year when Lumsden ran it from October 2006 through November 2012, according to investors. Competing hedge funds trading asset-backed securities rose an annual 9.1 percent in that period, Hedge Fund Research Inc. data shows.
Andrew Honnor, a spokesman for East Lodge Capital with Greenbrook Communications, declined to comment on the fund.
Lumsden is seeking to raise $250 million for East Lodge Capital before the hedge fund starts trading, the person said. He plans to hire as many as 14 employees focused on trading and business functions, the person said.
East Lodge Capital was registered on Aug. 27, according to a filing with the U.K.’s Companies House.
Lumsden managed $3.2 billion of hedge fund-assets at CQS. His best year running the CQS ABS Fund was in 2008 when it surged 73 percent. Lumsden wagered that banks that loaded up on securities tied to subprime mortgages would be hurt when credit markets froze, investors said. Other hedge funds trading asset- backed securities fell 3.4 percent on average in 2008, according to Chicago-based Hedge Fund Research.
London-based CQS, founded in 1999 by former Credit Suisse Group AG convertible-bond trader Michael Hintze, manages about $12 billion.
--Editors: Simone Meier, Jon Menon