Meriwether Fund Down 9%

Mar 7 2008 | 9:31am ET

It isn’t quite déjà vu, but a hedge fund run by Long-Term Capital Management founder John Meriwether isn’t weathering the credit crisis well.

Meriwether’s Relative Value Fund is down 9.19% in the first two months of the year, his firm, Greenwich, Conn.-based JWM Partners, has told investors. The performance is the $1.2 billion fund’s worst since its 1999 launch.

In a note to investors in January, about one-third of the fund’s 4.14% decline that month was attributed to “an extreme spread widening in AAA commercial mortgage-backed securities,” Reuters reports.

In spite of the unprecedented bad news, Meriwether told investors he sees better things ahead.

“While we are clearly disappointed by our recent performance, we remain optimistic about the current opportunity set,” he wrote in the January note.

“While we do not welcome the increased volatility in our returns, we believe that increased market volatility is one of the primary preconditions for creating interesting relative value situations.”


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