Wednesday, 20 August 2014
Last updated 2 hours ago
Apr 28 2008 | 7:13am ET
Strategic Value Partners is closing its $600 million market-neutral hedge fund because it expects the strategy to be on the ropes for at least five years.
The Greenwich, Conn.-based firm told investors that its market-neutral fund “is simply not viable in today’s environment” in a letter from founder Victor Khosla obtained by Bloomberg News. Investors in that fund, the Credit Opportunity Fund, which shed 6.4% in the first quarter, have the option of moving their investment to Strategic Value’s $4.4 billion distressed securities Restructuring Fund.
Investors who choose that option—Khosla indicated that two-thirds of Credit Opportunity clients are interested in such a move—will have performance fees waived until it recoups their loss in Credit Opportunities. Restructuring fell 2.3% in the first quarter.
Khosla, whose firm is raising funds for both Restructuring Fund and its private equity Special Situations Fund, said distressed debt offers a very attractive long-term opportunity.
“The nine months leading up to March 31 have seen a substantial sell-off in the credit markets, setting up that once-in-a-7-to-10-year investment opportunity,” he wrote.
Aug 4 2014 | 7:42am ET
By now, U.S. and international subscribers have received their home or office delivery of the special 500th issue of Futures magazine. You can too!—a very special offer follows. The issue is the largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders. Read more…
The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.
The Alpha Pages Editor's Note