Whitebox Suspends Redemptions After Margin Call

Oct 24 2008 | 10:04am ET

A Minneapolis hedge fund has halted withdrawals following a huge margin call.

Whitebox Advisors is suspending redemptions after Goldman Sachs doubled its margin requirements on the hedge fund’s convertible bond portfolio, Hedge Fund Alert reports. Whitebox met the demand by putting more of its own capital and devalued holdings up as collateral, leaving it without enough liquidity to meet redemption requests.

The $4 billion firm was drafting a letter to investors to explain the situation, HFA reports, as well as to lay out the terms under with clients can get some of their capital out of the fund.

Whitebox, which enjoyed double-digit returns last year, has not been so lucky this year: Two of its funds are in the red year-to-date.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Often seen as a passion project, or part of a philanthropic venture, rare and fine stringed instruments offer an exciting option to diversify one’s investment portfolio while providing an opportunity for an exceptional long-term investment.