Hedge Fund Sues RBS Over Early Withdrawal

Jul 23 2008 | 9:36am ET

A hedge fund is suing Royal Bank of Scotland over a promise allegedly made by ABN Amro.

London-based Merebis Capital Management has filed suit in London High Court, accusing ABN—which was acquired by RBS last year—of failing to pay a £17.8 million (US$35.6 million) penalty for early withdrawal, which Merebis claims it is owed under the terms of ABN’s investment.

According to Merebis, founded by four former ABN traders, RBS asked to redeem all of the €250 million (US$397.2 million) investment made in the fund by ABN, which seeded the new hedge fund last July. Merebis claims that ABN agreed to a three-year lockup at the time, subject to exceptions, and that it is entitled to a 10% early withdrawal penalty.

The hedge fund says it repaid most of the investment this month—the sell-off of portfolio holdings pushed the fund’s loss from 1.7% to 5.9%—but that its request for the £17.8 million penalty has not been met.

Merebis was forced to shutter the fund after filling RBS’ redemption request; it raised very little money aside from the €250 million in seed capital.


In Depth

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

In search of the ‘new normal’ at the Fed

The Federal Reserve keeps baby-stepping toward a “normalization” of monetary policy. But just what is normal?

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.