Former Goldmans Professionals To Start Hedge Fund That Taps Need For Capital Post-2008

Tom Burroughes

17 June 2015

A pair of former Goldman Sachs investment professionals are planning to create a private debt hedge fund, Firebreak Capital, that aims to exploit the gaps in the markets created by the raft of regulatory and capital rule changes since the 2008 financial crisis.

Rob Allard, founding partner and chief executive, and Jonathan Egol, founding partner, chief investment officer, are to launch the business later in 2015. Another member of the senior team is Jerry Chang, its chief financial officer; he also has spent time working at Goldmans. Firebreak's offices are in Park Avenue, NYC, according to the firm's website.

Firebreak aims, its creators say, to be an alternative balance sheet in the illiquid lending and investment sector, leveraging the emerging disruptive trends in consumer and commercial direct lending, as well as providing private credit, asset-backed and structured finance solutions”.

Since 2008, traditional bank lending and related services have been squeezed by regulations but borrowers, starved of their former supply of capital, are using new channels to get financing – a process sometimes referred to in media and public commentary, not always accurately, as “shadow banking” .

“The skillset required to be successful in monetizing this opportunity is distinct and unique from typical fixed-income trading strategies,” Allard said in a statement. “It comes from sell-side experience, a deep well of sourcing, structuring, and risk management expertise tested through market cycles. You either have that experience or you don’t,” he continued.

At Goldman Sachs, Allard was head of structured product origination and distribution, and Egol was head of the mortgage CDO, correlation and derivatives trading business, in addition to sitting on the institution’s GS bank risk and counterparty credit risk committees.

Chang comes from Prosiris Capital Management, where he served as CFO and senior advisor. Prior to Prosiris, Chang was CFO and chief compliance officer for ING Clarion Capital . He has also worked at the alternative investments group at Goldman Sachs Asset Management.