Black Diamond founder forms new firm

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James Zenni, cofounder of the $9 billion Black Diamond Capital Management, is launching a new firm that will focus on distressed debt. The new firm, Z Capital Partners of Lake Forest, Ill., will begin trading its first fund this month.

Zenni managed Black Diamond - not to be confused with the Black Diamond funds managed by Carlson Capital - with co-founder Stephen Deckoff from the firm’s 1995 inception until October 12, when Deckoff and several members of the senior management team agreed to purchase Zenni’s stake.

Six of Zenni’s associates from Black Diamond are joining him at Z Capital, including