Pine River Mortgage Fund Returns Client Capital

Jun 16 2014 | 9:45am ET

Pine River Capital Management has returned outside capital invested in a mortgage hedge fund designed to profit from the financial crisis.

The Minnesota-based firm, which also recently closed its $4.5 billion flagship to new investment, returned client money in its Liquid Mortgage Fund this month, The Wall Street Journal reports. The fund’s performance had been flat for the past year-and-a-half, after strong returns in 2012, when it rose 29%.

Liquid Mortgage invested in agency mortgage bonds, which were hard-hit during the financial crisis. Despite the fund’s success, managers Jiayi Chen and Steve Kuhn reportedly believe that the outsized returns the $700 million fund once enjoyed are unlikely to be repeated.

Indeed, Pine River is seeing fewer opportunities all around: It told clients in its main Pine River Fund that it would stop accepting additional investment due to “few outsized opportunities.”


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