(Bloomberg) -- Nick Pappas, a veteran credit specialist who has held senior roles at Michael Hintze’s CQS and Goldman Sachs Group Inc., is starting his own debt fund focused on European investments.

Pappas is planning to launch Faros Point Capital Management with at least $200 million, according to people with knowledge of the matter. Faros point has received backing from a group of US college endowments and plans to close the fund to new capital within the next six months or sooner if it reaches about $500 million, said the people, asking not to be identified as the details are private.

The fund will focus on opportunistic credit investments in European public and private markets, according to an investor presentation seen by Bloomberg News.

Faros Point is targeting 20% net annualized returns, according to the presentation. The team will include Michelle Cruz Peverley as head of partner relations and strategy, as well as two senior research analysts who previously worked at CQS, the document shows. 

A representative for Faros Point declined to comment.

Pappas was global head of credit at CQS, where he spent more than three years after joining in 2017 from BlueMountain Capital Management. Prior to that, he led leveraged finance for Europe, Middle East and Africa at Goldman Sachs, and was co-head of US credit at Deutsche Bank AG.

He joins a small group of credit traders who have succeeded in convincing clients to back them in an industry that’s increasingly dominated by multi-strategy hedge funds, or those where groups of traders invest across asset classes.

Former Citadel traders Jonas Diedrich and Dave Sutton started trading with client assets of $1.85 billion on July 1 for their London-based Ilex Capital Partners, while distressed debt specialist Michael Sutton is teaming up with a former Deutsche Bank colleague for one of the biggest European hedge fund launches of the year.

Still, more than 2,500 hedge funds have been shuttered over the past five years, exceeding launches during the period, according to data compiled by Hedge Fund Research Inc.

Faros Point — named after the Greek word for lighthouse in a nod to Pappas’s heritage — will be based in London.

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