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Blackstone seeds Swiss Re veteran Marc Fussteig

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Arbitrage firm Orchard Hill Capital Management will launch in the first half of 2012.

Marc Fussteig, a former managing director for capital structure arbitrage at Swiss Re, is preparing the launch of Orchard Hill Capital Management in the first half of 2012, according to people familiar with his plans. Orchard Hill, an entity set up by the Swiss reinsurer to unwind certain proprietary trading positions, has secured at least $150 million from Blackstone’s seeding arm, Blackstone Alternative Asset Management.

Orchard Hill Master Fund will use a relative value strategy, engaging in convertible, capital structure, relative value and special situations arbitrage. The Orchard Hill deal will be the eighth investment from Blackstone’s $2.4