King Street Capital Management
From $4M to $22B AUM, a story
In 1995, two First Boston alumni Brian Higgins and Francis Biondi started a hedge fund inside a windowless office thinking they can launch with $50 million, they started with only $4 million. That humble beginning has turned into a $22 billion big dog credit hedge fund, King Street Capital Management.
Specializing in a wide range of credit strategies—from long/short credit to distressed debt—the firm has carved out a reputation for Blending technical trading and fundamental research and navigating complex situations. After nearly 25 years of co-leadership, Biondi departed in 2019, leaving Higgins to continue steering the firm’s operations and legacy.
Today, we will dive into King Street Capital Management.
The founders
Brian Higgins grew up in New Brunswick, NJ, with a fascination for numbers that began on the sports fields. As a kid, he devoured sports statistics and meticulously read the sports pages, developing an early knack for analysis. Alongside his passion for stats, he showed an entrepreneurial streak, building a lawn-mowing business that grew to an impressive 60 customers by the time he was a teenager. But Higgins' ambitions extended beyond his small town.
At Villanova University, Higgins initially pursued electrical engineering, drawn by its rigor but soon disillusioned by the monotony of the curriculum. The roaring 1980s, dominated by financial innovations, Milken's junk bonds, and a frenzy of mergers, caught his attention. He joked that he was probably the only electrical engineering major subscribing to The Wall Street Journal. Hooked by the excitement of the markets, he switched his major to finance two years into college and began plotting his path to Wall Street.
Armed with a suit and a stack of resumes, Higgins spent his spring break riding buses to Manhattan from Philadelphia, knocking on doors of firms, and leveraging every connection he had—even a client from his lawn-mowing days who worked on Wall Street. His tenacity paid off when he graduated in 1987, securing an analyst role at First Boston in the merchant banking division. There, he crossed paths with Francis Biondi, a Yale graduate who joined the bankruptcy advisory group within the same investment banking analyst class.
While Higgins was promoted to associate in 1989 and moved into proprietary trading of distressed debt—skipping the traditional business school route—Biondi took a more conventional path, heading to Harvard Business School for his MBA. In 1991, their paths converged again when Higgins began running an internal hedge fund within First Boston, and Biondi rejoined him post-MBA. The pair faced the challenges of operating a startup fund within a large institution, navigating the bureaucracy and enduring constant leadership changes under five different CEOs in eight years.
Frustrated by the constraints of investment bank life, Higgins and Biondi took a leap of faith, leaving First Boston in 1994, months apart. In 1995, they launched King Street Capital Management, where their entrepreneurial instincts and deep expertise in credit would lay the foundation for one of the most prominent credit hedge funds in the world.
More to come:
Early days of King Street
Product evolution
Firm organization structure and process
Investment team background
Advice on becoming a successful credit investor