Synapse Shutters Fund After German Bank Pulls Out

Sep 4 2007 | 12:07pm ET

London-based Synapse Investment Management has shuttered one of its three fixed-income hedge funds after its main investor, a troubled German bank, pulled its money out.

While the Synapse High Grade ABS Fund had no direct exposure to the U.S. subprime mortgage market, its chief investor, Landesbank Sachsen Girozentrale, did. The state-owned bank was bailed out to the tune of €17.3 billion (US$23.6 billion) by its fellow state-owned banks, one of which, Landesbank Baden-Würettemberg, has agreed to buy it.

The Wall Street Journal reports that SachsenLB’s decision to withdraw its entire investment in the ABS fund forced Synapse’s hand. The firm blamed “severe illiquidity” for the closure, and said it has already sold some assets.

Synapse now has assets under management in its two remaining funds of about €300 million (US$409 million). At the end of July, the three funds boasted €500 million (US$681 million) in assets.

“We are going to look at starting new funds,” Synapse co-founder Mark Holman told Bloomberg News. “There are enormous opportunities in the ABS market caused by this enormous deleveraging and we intend to return with a fund that can exploit them.”

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…