Fund Of Distressed Hedge Funds Makes Its Debut

Oct 13 2008 | 10:03am ET

The vultures are circling hedge fund investors, in the form of an innovative new fund of hedge funds.

Permal Investment Management Services has launched a fund of funds to buy hedge fund investments at a steep discount from other funds of funds forced to sell.

The fund, which has been buying about one investment per month from various sellers, can generally buy the investments at a 25% to 30% discount to their market value, but the ongoing market disaster is playing right into its hand.

“Now, it’s available at a much grander scale,” Omar Kodmani, senior investment officer, told Financial News. “Discounts could be anywhere between 10% and 50% in the extreme. Now, larger discounts are available than is normally the case.”


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Versum Materials (VSM), with a market capitalization of $2.7 billion, enables chipmakers to achieve higher performance at lower cost with enhanced reliability. Versum is a leading global provider of electronic materials for the integrated circuit and flat-panel display markets.