(Bloomberg) -- Nick Pappas, one of the most senior portfolio managers at Michael Hintze's CQS, has left the firm to set up his own distressed debt investing fund, according to people with knowledge of the matter.
Pappas is planning to partner with Ivelina Green, CQS's former head of special situations investing, for his new venture, the people said, who asked not to be identified as the matter is private.
The move is the latest in a slew of senior departures from London-based hedge fund CQS, which has been battling to recover record losses from earlier this year, when Hintze's structured credit bets imploded as the coronavirus roiled markets.
A spokesperson for CQS had no immediate comment.
Pappas joined CQS in 2017 as its global head of credit from BlueMountain Capital Management, while Green had been the hedge fund's most senior female portfolio manager before her resignation in September.
Pappas and Green have told potential investors that they're planning to launch their firm Broadstone Credit Partners next year, the people said. The firm is named after Broad and Stone streets in downtown Manhattan, the intersection of which used to be home to Goldman Sachs Group Inc.'s offices in New York. The pair first met there in 2004 while working on the bank's credit trading desk, the people said.
They will be co-founders and partners in the new business, which will invest in global distressed credit, with a particular focus on Europe and middle market companies, the people said. The size of the fund hasn't been finalized, they said.
CQS lost senior managers this year as the firm moved to reduce staff and ditched its expansion plans in an effort to cut costs. Hintze, who also lost his longtime friend and former London Stock Exchange Plc boss Xavier Rolet as chief executive officer earlier this year, last month moved to accelerate succession planning at the hedge fund.
Fund industry publication HFMWeek earlier reported Pappas's departure.
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