The subprime mortgage securities market has plenty of hedge fund blood on its hands already, and it has claimed yet another victim.
Denver-based Braddock Financial Corp. announced yesterday that it will liquidate its $300 million Galena Street Fund, which has been buffeted by redemption requests as subprime investors have taken a beating.
News about the subprime market “just made investors nervous about being invested in the subprime market at all,” Braddock CEO Harvey Allon told Reuters. “People voted with their redemption requests.”
The fund, which returned just 7% last year, was down roughly 3% in the first quarter of this year.
Investors, whose redemptions had already slashed the size of the fund by a quarter, will get one-fifth of their money back by early next week, Allon said, with the rest coming “more frequently than quarterly” thereafter.