BlueBay To Close Hedge Fund, Manager Quits

Dec 1 2008 | 3:03am ET

BlueBay Asset Management is closing a fixed-income hedge fund after accusing its manager of breaking valuation rules.

The London-based firm will close its US$1.2 billion Emerging Market Total Return Fund, which was “dramatically” burned by bets on bonds and credit default swaps. The fund is down 53% this year, according to a statement from BlueBay, leaving it not “viable as a standalone strategy.”

“We are operating, as has been the case for some time now, in extremely challenging credit market conditions,” CEO Hugh Willis said. “We remain focused, however, on the cyclical opportunity ahead and on our ability to capitalize on this.”

Meanwhile, the Emerging Market fund’s manager, Simon Treacher, has resigned after violating “internal valuation policy,” BlueBay said. The firm stressed that Treacher’s alleged unauthorized adjustments to the fund’s numbers had nothing to do with its failure.

“The breach was recent, limited and resulted in no material impact on the net asset value of the fund, or of any other funds managed by the company,” BlueBay said. “The company would like to stress that there is no connection between the breach concerned and either the recent losses incurred on the fund or the intention to wind the fund down.”

The firm has reported the incident to the U.K. Financial Services Authority, it said. The alleged changes were apparently so small as to make little or no difference to the fund’s net asset value calculation.


In Depth

Q&A: Portfolio Advisors' Brian Murphy On The Advantages of A Private Markets Platform

Jan 2 2018 | 11:05am ET

Most private markets firms reference their platforms as a source of competitive...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Steinbrugge: The Top Hedge Fund Industry Trends for 2018

Jan 2 2018 | 12:22pm ET

Each year, Don Steinbrugge’s Agecroft Partners compiles the insights gained...

 

FINalternatives Trending

From the current issue of