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

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

Looking for a way to keep warm during the cold weather or rather alleviate your cold while under the weather?