Their mini resolution trust is named after a bottom-dwelling, scum-sucking shellfish and the promoters of the Mytilus fund indeed expect to play a very useful role extracting value from the sunken casualties that lurk in Asia's distressed-debt securities markets.
Mytilus, managed by the Asian Debt Recovery Company (ARDC), differs from other Asian impaired-value funds in offering vendors a share in the upside of any recoveries made on their assets. That is because vendors get units in the fund, not cash for assets they vend in.
Since its establishment in June, Mytilus has garnered 10 investors, exchanging assets with a market value of $25 million and an average discount to face value of around 60%. Mytilus holds paper from 25 names from Indonesia, Thailand, Korea, Hong Kong and Malaysia. The dishonour roll includes Peregrine Investment Holdings, Thailand's Alphatec and Sonprasong Land, and convertible bonds from high-profile Korean failures Kia and Jinro.
Key players in the fund-management team include George Long of Hong Kong hedge-fund operator Long Investment Mangement, who will act as chief investment officer; Robert Appleby, previously managing director of Asian fixed income at Crédit Agricole Indosuez; Christopher Botsford, managing director of debt-structuring firm Asia Financial Products; Phillip Gray, former executive chairman of HSBC James Capel; and David Brougham, just retired as executive director of Standard Chartered, Hong Kong and China.