CQS To Soft-Close Mortgage-Backed Hedge Fund

Jun 16 2011 | 12:03pm ET

CQS will close its mortgage-backed securities hedge fund to new investors when its assets under management hit US$2 billion, the firm said.

London-based CQS told investors in the CQS ABS Fund, which has annualized returns of about 35%, that the soft-close was necessary to "carefully and thoughtfully" manage the fund. The fund, launched five years ago, currently manages US$1.6 billion.

Until that time, inflows will be "managed" on a monthly basis, fund manager Alistair Lumsden wrote.

CQS' flagship Directional Opportunities Fund is already closed to new money. The firm's total assets have almost doubled over the past year-and-a-half; it now manages about US$11 billion.

The closure of the fund, first reported by the Financial Times, was delayed to allow pension funds currently conducting due diligence to get in before the doors close.

"We are fully cognisant of the amount of time investors need to complete their due diligence and we are ensuring with our soft close process that all clients receive adequate notice," Lumsden wrote.

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