Hedge funds on the brink as US Federal Reserve cash fails to ease crisis Hedge funds on the brink as US Federal Reserve cash fails to ease crisis - Times Online
Several hedge funds with assets of more than $4 billion (£2 billion) were on the brink of collapse last night or had halted withdrawals, despite moves by the US Federal Reserve this week to ease America’s deteriorating credit crisis with a $200 billion collateral lending facility.
The potential closure of six funds came as a leading private equity executive, who declined to be named, said that such funds were “snapping like twigs”, with one failing every day.
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Separately, GO Capital Asset Management, an Amsterdam investment group, said that it had frozen its $881 million Global Opportunities hedge fund, preventing investors from withdrawing their capital. About half the fund’s investors have already asked to withdraw their investment.
Mr Faillace and Mr Luttrell told investors that the closure of their fund was one option but that they were also considering an arrangement whereby investors could choose whether to be repaid over the next 18 months or have their capital rolled over into a new fund.
ING, the Dutch bank, said that it had frozen two investment trusts in New Zealand that were highly exposed to mortgage-backed bonds, blaming the global credit crunch. ING said that the two funds held assets worth €275 million between them.