FINalternatives reports that $10.4 billion fund of funds shop Morgan Creek Capital Management has launched a distressed offering that targets the credit market. The article cites an unnamed source as saying the Chapel Hill, North Carolina-based firm last month launched the Dislocation Fund, a $36 million vehicle that will invest in hedge and private equity funds, and is looking to raise some $500 million.

The Dislocation Fund will invest in around 20 underlying managers focusing on leveraged loans and senior debt, mortgage-backed securities, CLOs and municipal bonds. The fund has a five-year lockup, says FINalternatives, but will return capital to investors in line with some of its underlying portfolios, such as coupon payments from munis.

Morgan Creek was founded in July 2004 by Mark Yusko. In April 2005, the firm entered into a joint venture with Julian Robertson and Tiger Management to develop an investment platform through an affiliate called Tiger Select Fund Management.