Lombard Odier To Close Two Funds Of Funds, Open Two New Ones

Jun 3 2009 | 3:32am ET

Lombard Odier Darier Hentsch & Cie is closing a pair of funds of hedge funds, but plans to replace them in its product line with two new funds of funds.

The Swiss private bank said yesterday that it would liquidate the Delta Global and Alternative Strategies funds, which manage a combined 1.1 billion Swiss francs (US$1.03 billion), Reuters reports. The funds were battered by the economic crisis last year, losing 41% and 30%, respectively, and have been buffeted by redemption requests. The liquidation plan announced by the firm will allow it to avoid forced sales of the funds’ more illiquid assets at distressed prices.

Closing Delta Global, which launched in 1991, and Alternative Strategies give Lombard Odier the opportunity “to create the economic equivalent of side pockets and to restructure our product range by launching new products at the end of June,” Cedric Kohler, co-head of hedge funds at the bank, told Reuters.

Lombard Odier said it expects to return about 60% of the funds’ assets to investors this year, with the rest to come next year.

While Delta Global and Alternative Strategies are out, two new funds are in at Lombard Odier. The firm has already prepared a pair of products for debut at the end of the month: LO Dynamic Alternative Strategies, a multi-strategy fund, and LO Alternative Beta, a hedge fund replication index product.


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