Calamos Reopens Convertible Fund

Oct 8 2008 | 2:00am ET

Calamos Investments is the latest alternative investment firm to aim to profit from the market turmoil, with the reopening of its convertible strategy to new investors.

 The firm has reopened the 23-year-old Calamos Convertible Fund five-and-a-half years after last closing it. Naperville, Ill.-based Calamos said the reopening might be temporary, depending on liquidity conditions, new issuance and proprietary value screens.

“We’ve had many requests over the years to re-open the Convertible Fund, and our response has always been, ‘not until we identify a significant opportunity that may be advantageous for both new and existing investors,’” John Calamos, co-chief investment officer, said. “Well, we think we have found one.”

“The general de-leveraging of the capital markets has created immense pressure on convertible valuations.” Nick Calamos, co-CIO, said. “Forced selling by prime brokers going out of business and convertible arbitrage hedge funds has caused prices to fall across the entire convertible market. Some of the selling appears to be coming at any price, as participants make a desperate attempt to get out of positions. While hedge fund participation has arguably made the convertible market more efficient, hedge funds can also increase the short- term inefficiencies of the market as they may be forced to sell for non- fundamental reasons.”

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