Rumson Capital, the $500 million convertible-bond arbitrage is reportedly heading towards the hedge fund scrap heap thanks to the ongoing credit crisis.

The firm has notified its investors that it is winding down its Navesink Equity Derivative Fund by June 30 because redemptions have cut the fund’s assets in half from a peak of $570 million last year, Hedge Fund Alert reports. The fund was down 13% in the first quarter.

Rumson was founded in 1993 by John Burke, portfolio manager and managing partner. E.J. Werner, head of trading, and Lothar Sroka, head of systems and research, round out the soon-to-be-defunct firm’s management team.