BlueBay To Close Hedge Fund, Manager Quits

Dec 1 2008 | 2:03am 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

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

As initial anxiety over Donald Trump’s victory gave way to market euphoria in the days following the election, there was a casualty. Gold prices.