Activist hedge fund manager Pardus Capital Management has suspended investor redemptions in the face of sharp losses in its concentrated portfolio.
The $2 billion fund manager said yesterday that it had informed investors of the withdrawal halt last week.
“The actions we have taken will allow us to protect the funds and their investors from the external short-term pressure of the broader financial markets and focus on realizing value on our portfolio companies for investors over an extended period of time,” Pardus said in a statement.
Pardus, which invests in about 10 companies, said it plans to sell its positions over the next two years to fulfill redemption requests. It will not make any new investments.
“We have taken a long-term investment perspective,” the firm explained. “The funds have been disproportionately affected by recent market volatility.”
The New York-based firm does not use leverage, but its funds have been battered by its handful of positions. The firm made news last year for its public push for a merger between Delta Air Lines and United Airlines; its investments in both airlines have suffered. Its stakes in General Motors and auto parts maker Visteon Corp. have also dragged down returns; the funds fell almost 24% last year and are now down 40% from their high-water mark set about a year ago.
Hedge Fund Pardus Capital Loses 24% In ‘07