Archeus Throws In The Towel, Blames Service Provider

Oct 30 2006 | 7:02pm ET

New York-based Archeus Capital Management is the latest hedge fund to fall from glory and announce that it is shuttering its doors.

The firm, which once had $3 billion in assets under management and now handles approximately $700 million, plans to wind down at the end of the year, according to a letter sent to investors.

In the letter, Archeus said it was unable to get back on its feet following a series of redemptions, which were sparked by investor worries over record-keeping problems, and that investors’ money would be returned Dec. 31.

According to the letter, "One obstacle we have not been able to overcome has been the negative sentiment which has snowballed as a result of our third-party administrator’s failure to properly maintain the books and records of our funds," stated the letter, which was signed by by  CEO Gary Kilberg and CIO Peter Hirsch. "This failure, and their subsequent inability to properly re-reconcile the funds’ records, led to a series of investor withdrawals from which we have not been able to recover."

Although the letter did not mention the name of the service provider, numerous sources confirmed that it was GlobeOp Financial Services.

A spokeswoman for GlobeOp told FINalternatives, “We totally disagree with the allegations being made, but are in a difficult situation because we respect the confidentiality agreements signed with our clients, therefore, we don’t publicly discuss the details of any of any of our client relationships.” She added, “And while it is easy to point figures at third parties, as several articles have pointed out, investors typically liquidate based on a fund performance results.”   

(Updated Nov. 2, 2006)

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…