Plainfield Asset Management

Plainfield was founded in 2005 by Max Holmes, the former Head of the Distressed Securities Group and a managing director of D. E. Shaw & Co., L.P.^[1]

On June 8, 2011, The New York Times ran an article discussing the trend of hedge funds lending money to businesses who have been unable to secure loans from traditional lenders. In the article, Max Holmes warns of the dangers hedge fund may find themselves in when engaging in this practice, “The new funds rushing into direct lending now will learn the hard way that it is easy to make what appear to be sound loans as the economy is improving, but it becomes brutal to either collect the loans or foreclose when the downturn comes.” ^[2]

According to Fortune Magazine, “By the end of 2008, 93 percent of Plainfield's assets were illiquid -- and Plainfield was compelled to prevent investors from leaving.” ^[3] According to the same article: Plainfield's flagship fund witnessed 21.5% decline in 2008. Following the firm's deregulation and liquidation, investigations into lending practices conducted by the S.E.C. and Attorney General's office were concluded and, according to HFM Week, the firm received a letter from the SEC indicating its investigation was concluded with no action to be taken.^[4]