Northwater Says Fraud Affects Two Funds Of Funds

Oct 1 2008 | 9:01am ET

A Toronto-based hedge fund firm said yesterday it had to write down the entire value of a portfolio hedge fund that may have been the victim of fraud.

Northwater Capital Management did not identify the fund in question, which was held by two of its funds of hedge funds. But the firm, which manages C$8.5 billion, including C$4.8 billion in funds of funds, said it chose to write down the value of the fund to zero when calculating the funds’ net asset value for the end of the third quarter yesterday.

“Based upon the information it has received, it is not clear what portion of the trusts’ investments may be recovered, if any,” the firm said in a statement.

According to the firm, its Market-Neutral Trust had about 4.3% of its assets invested with the hedge fund in question; another fund, the Five-Year Market-Neutral Trust, had about 2.3% of its assets in the fund.


In Depth

OmniQuest Capital: Why Funds of Hedge Funds Work

Aug 11 2016 | 4:47pm ET

There have been few sectors of the alternative investment universe under as much...

Lifestyle

Vortic: Making Great American Watches Again

Jul 25 2016 | 6:29pm ET

If you are compelled by stories of entrepreneurial vision & drive, or simply...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...