Tuesday, 30 September 2014
Last updated 4 hours ago
Nov 4 2008 | 1:31am ET
Blue Mountain Capital Management is the latest hedge fund shop forced to suspend redemptions and seek a restructuring in the face of big redemption requests.
The firm has frozen its largest hedge fund, the $3.1 billion Credit Alternatives Fund, to avoid a forced asset sale, Bloomberg News reports. New York-based Blue Mountain took the step after investors sought to withdraw a “meaningful percentage” of the fund’s assets, with some of those redemption requests filed by funds of hedge funds facing “liquidity pressures” themselves.
“We are not comfortable with this state of affairs,” CEO Andrew Feldstein wrote to investors. “If we were to unwind or sell positions to meet current requirements, the severe liquidation costs would be borne inequitably by the remaining investors.”
Instead, the firm has asked investors to accept a plan under which it will waive both the notice and lock-up provisions of the fund. Under the proposal, clients could redeem their investment or exchange all or part of it with any of three share classes. Investors have until Nov. 10 to tell Blue Mountain what they want to do.
The bad news for Blue Mountain comes despite the fact that the Credit Alternatives Fund has avoided most of the pitfalls that have struck its peers, who are down, on average, nearly 20% this year. By contrast, Credit Alternatives is down just 2.4%, better than most hedge funds even outside the fixed-income strata. According to the letter, two other Blue Mountain hedge funds have posted above-average returns, with its $400 million BlueCorr Fund soaring 21.3%, and its $1.1 billion equity fund down just 0.9%.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
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