Saturday, 29 November 2014
Last updated 20 hours ago
Mar 5 2008 | 8:28am ET
The founders of collapsed London hedge fund Peloton Partners are set to apologize to investors in a conference call today.
Geoff Grant and Ron Beller, both Goldman Sachs veterans, will explain how their once high-flying ABS Fund—which returned 86.6% last year during difficult times for credit markets—was undone so quickly. The fund, which managed US$2 billion as recently as January, was wiped out when its portfolio of mortgage-backed securities fell sharply in recent weeks.
As the hedge fund missed margin calls, banks began to seize its assets. The fund has since sold all of its assets to repay banks, which may still be on the hook for some of the losses.
Peloton is also expected to shutter its once-US$1.6 billion Multi-Strategy Fund, 40% of which was invested in the ABS fund.
Beller and Grant are also expected to discuss claims that some of its lenders changed their loan terms in spite of long-term margin agreements, as well as how much leverage the ABS fund was using.
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