Closing Shop An Expensive Proposition For D.B. Zwirn

Nov 13 2008 | 2:34pm ET

Liquidating a hedge fund in the current market environment is no easier than running one. It is also proving, for Daniel Zwirn, anyway, to be personally very costly.

The D.B. Zwirn & Co. chief has spent as much as $50 million of his own fortune to keep the firm afloat as it unwinds its flagship hedge fund, the once-$4 billion Special Opportunities Fund. Zwirn announced that he would shutter the fund and its offshore version in February.

But selling off the fund’s assets is proving to be a very slow process, that is expected to take years. He’s currently trying to sell off loans to small and mid-sized companies, but has found the effort difficult to sustain as his asset base—and fee income—dwindle.

So Zwirn, who hopes to relaunch the Special Situations strategy in the future, is digging into his own pockets, Hedge Fund Alert reports. He has used deferred compensation, including $12.6 million of his own, to fund the firm’s operations, including paying the rent at 745 Fifth Avenue, paying vendors and paying employees. By paying for them himself, Zwirn hopes to ensure that investors will get all of what is left of their money back.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


Hedge Funds Swarm Into Palm Beach

Oct 27 2016 | 2:32pm ET

As the first flakes of snow fall on New York's northern suburbs, Dan Weil of South...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...