Kamunting Street Returning Outside Capital, Will Convert to Family Office

Apr 10 2015 | 9:04am ET

Kamunting Street Capital is shutting down and will return outside capital to investors.

Founded by Allan Teh, the former CIO of Citigroup’s Tribeca Global Investments, Kamunting is the latest investment firm to fall victim to the historic drop in energy prices. 

The fund was particularly hard hit by the bloodshed in high-yield bonds, according to media reports. The sharp decline in oil severely impacted the high yield credit space due to high issuance of junk bonds by energy companies in recent years. 

Teh also noted redemption-related selling by PIMCO on the heels of Bill Gross’s departure and drops in Fannie Mae and Freddie Mac securities last fall as further headwinds for his fund.

Kamunting was down 4% in 2014 and lost a further 2% in the first quarter of this year, according to the reports. In contrast, the average credit manager was up approximately 4% last year and is ahead 1.7% through March 31st of 2015, recent data from Hedge Fund Research shows. 

The Greenwich, CT-based fund, whose AUM reached a peak of $1 billion in 2007, now manages less than $300 million as redemptions have rolled in. The remaining outside capital will be returned and the fund essentially converted to a family office managing Teh’s own money.

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