King Street May Close Flagship Fund At $20B

Feb 18 2010 | 2:13am ET

King Street Capital Management may close its flagship hedge fund to new investments, it told investors.

The New York-based firm has seen the fund’s assets swell over the past year, when it returned 20.1%. The fund now manages $19.2 billion, up from $15.8 billion last January. But the firm doesn’t want the fund to get much bigger.

King Street hopes to keep the fund from exceeding $20 billion, Hedge Fund Alert reports.

The firm will “moderate the future growth of the fund’s capital subject to developing market conditions,” it wrote to investors on Feb. 5.

King Street also said it would change its redemption policy. Where the firm previously permitted withdrawals totaling only 25% of the fund’s overall assets, now investors will be permitted to redeem a quarter of their investment every quarter—regardless of what other investors do.

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