Thursday, 11 February 2016
Last updated 20 hours ago
Oct 4 2011 | 3:16am ET
Salida Capital yesterday was forced to deny rumors that its collapse was imminent, acknowledging that it had suffered huge losses in the commodity markets but insisting that it remained solvent.
Rumors that the US$900 million Toronto-based hedge fund is on the ropes are "unfounded," CEO Courtenay Wolfe told Bloomberg News.
"Salida is not going anywhere; we're not blowing up," she said. "We're having a difficult time in the markets, like everybody else. Everybody sees the volatility."
Salida's difficulties have translated into a 20% swoon for its Strategic Growth Fund this year—most of it due to a 17% drop over the past month. Its publicly-traded Wealth Preservation Listed Fund's share price has plummeted 25% since April, as Salida's bets on gold and oil backfired.
"We still believe the reasoning was logical, but arguably ill-timed. In hindsight, we underestimated the short-term impact of forced selling," the firm wrote in a report to investors yesterday.
"Not only did the bounce not occur, but the sector has continued to sell off. Sell of is an understatement—it's been decimated.
In response, Salida has increased its hedges.
Wolfe told Bloomberg that she's been in touch with "key" Salida clients and that the firm has not seen an increase in redemption requests.