Thursday, 24 July 2014
Last updated 6 hours ago
Feb 23 2009 | 12:37am ET
Highland Capital Management is closing its third hedge fund in less than five months, with investors in a collateralized debt obligation vehicle losing everything.
Dallas-based Highland told investors in its CDO Opportunity Fund earlier this month that what’s left of the fund’s assets would go to creditors. Clients in the fund, which managed some $361.6 million before the start of the credit crisis, will get nothing.
“We are extremely disappointed in the funds’ performance and this outcome, but believe there is no viable path to any recovery for investors,” Highland wrote in a Feb. 4 letter to investors, according to Bloomberg News. The fund’s liabilities exceed its assets “to such a degree” that there will be nothing left. The firm blamed “the unprecedented market volatility and disruption to the financial system, and the market for structured products assets in particular.”
“It is in the best interests” of the fund to shut down, the letter said. Highland itself was the fund’s largest shareholder.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…