Cevian, Up Almost 30%, Mulls Closing Largest Fund

Nov 8 2010 | 11:00am ET

Activist hedge fund Cevian Capital may stop accepting new investors as it seeks to avoid exceeding its strategy's capacity.

Senior Partner Harlan Zimmerman said the €3.5 billion firm might close its largest fund, Cevian Capital II, to new investors next year. At the very least, it seems probable Cevian will require new investors to accept a three-year lockup.

"If things play out as we expect, it is probable that we will close the fund to new capital in the first half of 2011," Zimmerman told Reuters. "We like to maintain a tight focus on about eight to 12 companies at a time. That means we need to be thoughtful about how and when we take in capital."

Cevian II currently manages about €3 billion. The fund returned 35.7% last year and is up 29.8% this year after returning 1.8% in October.

In addition to closing the fund to new clients, Cevian may block all inflows to its one- and two-year lockup share classes. Current investors would then have to put new money into its three- or five-year lockup share classes.


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