Maarten Petermann, who spent nearly two decades at JPMorgan Chase & Co., is preparing to start a hedge fund with at least $500 million of assets.

The Merlyn Advisors fund will bet on so-called special situations such as spinoffs, mergers and acquisitions, bankruptcy or distressed companies in Europe, according to people with knowledge of the plans. He was head of special situations in Europe at JPMorgan Chase before leaving the firm earlier this year.

Petermann is talking with potential investors around the world including pension and sovereign wealth funds, family offices, foundations and endowments, and plans to have at least $500 million on its first day of trading, said the people, who asked not to be identified because the information is not public.

The launch of Merlyn Advisors will be one of the biggest this year. Other significant startups include Michael Phelps’s Tresidor Investment Management, which attracted a $200 million buy-in from Blackstone Group Inc., and Martin Taylor’s Crake Asset Management, which is trying to raise $1.5 billion and is set to open in September.

New Funds
The asset size at launch has been steadily declining in recent years as mounting costs, a tough regulatory environment and investors’ reluctance to pay high fees weigh on the industry. The average size of a new hedge fund plummeted 65% in 2018 from 10 years earlier, according to Eurekahedge. For the first half of 2019, the average size of new funds is $13.3 million, the lowest since at least 2000.

More hedge funds have shut than started in each of the last three years, and the number of startups in 2018 fell to the lowest level in 18 years, according to data compiled by Eurekahedge and Hedge Fund Research Inc.

Investors, frustrated with poor performance and high fees, pulled $44.6 billion from hedge funds this year through June, including $16.4 billion in June alone, according to eVestment.

This article was provided by Bloomberg News.