Hedge Fund Alert: FTI Consulting Pitches LPs on Fund Wind-Down Services
FTI Consulting has launched its latest venture, FTI Capital Management. The unit will work with and advise investors in distressed hedge funds and private equity funds who have lost patience with management and want to wind down the vehicles while maximizing the values of their stakes.
FTI Consulting has experience in handling such assignments previously, but often has missed winning potential deals because it lacked credentials as an registered investment advisor. This new unit is set up to take over as a fund’s general partner once the original manager is removed by investors. FTI Capital would enlist help from the parent’s other units, including bringing in structured-finance and corporate-turnaround specialists as they are needed.
FTI Consulting currently has a client on boad ready to take over management of the private fund shortly. Most of the funds that will be worked on are likely to be private-debt vehicles with underlying loans that need to be restructured. FTI Consulting will charge clients a management fee for the services on top of a performance fee which will be directly tied to the amount of capital that is ultimately recovered.
Hedge Fund Alert speaks with FTI Consulting's Carlyn Taylor, the Global Co-Leader of Corporate Finance & Restructuring, who will lead the capital management group. She offers her insight into the reasoning behind the new endeavor and the firm’s plans to become increasingly more competitive in the space with the new ability to take over possession and manage the fund’s money. It is yet to be determined the demand among hedge fund investors for these specific services that FTI Consulting is offering.