Morgan Creek Capital Management, a $10.4 billion fund of funds house, has introduced a distressed offering to bank off opportunities arising from volatility in the credit markets, FINalternatives reports.

The firm launched the Dislocation Fund last month with $36 million and will invest in hedge and private equity funds. The firm aims to raise about $500 million, a source familiar with the firm’s business development operations told FINalternatives.

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