February 08, 2007

Hedge Funds’ Cup of Woes Overflows

-- Pushpa Sathish, Staff Writer

January has not been a good month for a few hedge funds. Red Kite lost more than 20 percent on bad bets on copper – the fund is now trying to deal with the investors who are knocking down its doors in an attempt to redeem their investments. The two-year old fund which had a strong showing last year is pinning its hopes on the 45-day notice that investors are supposed to provide before they pull their money out. The lock-out period was increased from 15 to 45 – perhaps in lieu of what was in store at the fund?

Meanwhile, across the ocean in the United Kingdom, things are not too good at the offices of SemperMacro. The hedge fund, beset by a cascade of troubles including a 16 percent loss last year and a subsequent withdrawal of funds by investors, is in the process of cutting back on its staff. SemperMacro, which was set up by a former Goldman Sachs employee and a former BBC chairman, plunged to $500 million from $1.5 billion after an investor redemption in December 2006.

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