The move to hedge fund ownership is part of a growing trend in the news industry, much to the chagrin of media advocates who have argued that financial firms do not make good stewards of a business built largely on holding the powerful to account.

Chatham is a major investor in Postmedia, the publisher of Canadian newspapers including The National Post, The Montreal Gazette and The Ottawa Citizen. It is also the principal owner of American Media Inc., the parent company of The National Enquirer supermarket tabloid.

Chatham is led by Anthony Melchiorre, a Chicago-area native who worked on Wall Street at Goldman Sachs and Morgan Stanley, where he led its junk bond division. He set up his hedge fund in Chatham, N.J., in 2002. The firm often takes on the debts of struggling businesses that still have good cash flow. American Media and McClatchy fit that profile.

McClatchy’s troubles can be traced back to 2006, when it bought its much larger rival, Knight Ridder, then the second-largest newspaper chain in the United States, for $4.5 billion, plus the assumption of $2 billion in debt. From shortly after the merger to the end of 2018, McClatchy’s work force went from more than 15,000 full-time employees to around 3,300, according to public filings.

The McClatchy chairman, Kevin S. McClatchy, the great-great grandson of its founder, has said that the company’s inability to meet its pension obligations tipped it into bankruptcy. The $1.4 billion pension plan, created 75 years ago, was intended to provide money to more than 24,000 current and future retirees.

Like other hedge funds, Chatham has benefited from investing in distressed companies. It took a financial interest in McClatchy not long after the chain’s financial troubles began.

Alden Global Capital, a New York hedge fund that has become a force in the news industry, had also expressed an interest in acquiring McClatchy during recent bankruptcy court hearings. It controls roughly 200 outlets through its newspaper chain, MediaNews Group. With a strategy that led to deep layoffs at The Denver Post and other MediaNews Group publications, Alden has managed to wring profits from a business that seemed past its heyday.

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