Camulos May Give Mariner Role in Hedge-Fund Business Operations

By Saijel Kishan

July 3 (Bloomberg) -- Camulos Capital LP, a hedge-fund firm founded by former Soros Fund Management LLC trader Richard Brennan, is in talks to have Mariner Investment Group run its business operations.

Mariner, an $11 billion firm managed by Bill Michaelcheck, may handle compliance, accounting and administration for Stamford, Connecticut-based Camulos, according to a June 30 investor letter obtained by Bloomberg News.

“For many of our partners, the ‘800-pound Gorilla’ issue is the stability of the Camulos platform,” Brennan said in the letter. “We are well aware of the concern.”

Camulos, started in 2005 to specialize in credit investments, told clients last year it may make changes to its main fund amid investment losses. After limiting withdrawals, it returned half of the 15 percent in redemption requests at the end of May and expects to pay out the rest by the end of this month. Some funds capped withdrawals after record losses that averaged 19 percent in 2008, according to Hedge Fund Research Inc. in Chicago.

A deal would give Camulos access to Mariner’s investor base, which is “key” to retaining its investment team, Brennan said in the letter. He said some employees may join Mariner to help with the transition and management of certain business operations.

Brennan’s Background

Brace Young, chief executive officer for New York-based Mariner, confirmed in an e-mail the details of the potential agreement. He declined to comment further. Brennan and Richard Holahan, general counsel at Camulos, didn’t return e-mails and phone messages.

Brennan worked for three years at billionaire George Soros’s New York-based hedge fund, where he managed credit investments. Before that he was a managing director at Merrill Lynch & Co.

Mariner, started in 1992 by Michaelcheck, invests client money in its own hedge funds as well as those run by others.

Hedge funds are private, lightly regulated pools of capital whose managers can buy or sell any assets, bet on falling and rising asset prices and participate in profits.

To contact the reporter on this story: Saijel Kishan in New York at skishan@bloomberg.net;