UPDATE: Hedge Fund Manager Found Dead

MarketWatch reports:

Villehuchet, 65, was found sitting at his desk with both wrists slashed, the Associated Press said, citing NYPD spokesman Paul Browne.

A box cutter was found on the floor along with a bottle of sleeping pills on his desk, but no suicide note was found, it said.

Villehuchet co-founded Access International Advisors LLC, which specializes in managing hedged and structured-investment portfolios.

He had been trying for a week to recover at least $1.5 billion in European funds that Access International had invested through Madoff's business, The Wall Street Journal reported.
Villehuchet once worked for the capital markets division of Credit Lyonnais SA as founder, chairman and chief executive officer of Credit Lyonnais Securities (U.S.A.), it reported, citing a company statement.

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Hedge Fund Manager Found Dead

Fund manager tied to Madoff loss found dead: reports
By Wallace Witkowski
MarketWatch

Last update: 1:49 p.m. EST Dec. 23, 2008

SAN FRANCISCO (MarketWatch) -- Thierry Magon de la Villehuchet, a fund manager who reportedly lost large sums in Bernard Madoff's alleged $50 billion Ponzi scheme, was found dead in a New York office building, according to media reports Tuesday. A New York City Medical Examiner spokeswoman told Reuters that de la Villehuchet, 65, was pronounced dead at 8 am Eastern, and that the cause of death was not known. He co-founded Access International Advisors LLC, which specializes in managing hedged and structured-investment portfolios.

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Another Hedge Fund freezes redemptions

Get your money out of the financial system while you still can...convert it to real value: gold & silver.

Citadel locks up investors’ funds

Posted by Stacy-Marie Ishmael on Dec 15 05:35.

Citadel Investment Group has joined the rush of hedge funds suspending redemptions to investors, a development that is in effect locking up hundreds of billions of dollars in cash during a volatile period in global markets. Ken Griffin, Citadel’s founder, sent a letter on Friday to investors in the group’s flagship Kensington and Wellington funds telling them that the group had decided to hold on to their money at least until March. Citadel has about $15bn under management after suffering big recent losses, and by imposing this lock-up joins a growing list of hedge fund groups - including Tudor, Farallon and DE Shaw - that have imposed restrictions on the ability of investors to withdraw money, the FT said.

This entry was posted by Stacy-Marie Ishmael on Monday, December 15th, 2008 at 5:35 and is filed under Capital markets, Hedge funds. Tagged with citadel.

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Modern-day Bank Runs and Bank Holidays

Here is a modern-day version of the "bank holiday". The hedge fund freezes the funds the minute you want to take them out.

D.E. Shaw, Farallon Restrict Withdrawals as Fund Freeze Deepens

By Saijel Kishan and Katherine Burton

Dec. 4 (Bloomberg) -- D.E. Shaw & Co. LP, the investment firm run by David Shaw, and Farallon Capital Management LLC limited withdrawals by clients, joining more than 80 hedge-fund managers to impose restrictions in the past two months.

D.E. Shaw, which oversees $36 billion, capped redemptions from its Composite and Oculus funds, said two people familiar with the New York-based company. Farallon, a $30 billion firm based in San Francisco, did the same with its biggest fund after investors asked to get back more than 25 percent of their money.

The firms are two of the biggest to block withdrawals, known as putting up gates, so they aren’t forced to liquidate investments at distressed prices to raise cash. New York-based Fortress Investment Group LLC said yesterday it froze an $8 billion fund after getting redemption requests for 40 percent of its assets. Tudor Investment Corp., the Greenwich, Connecticut, firm run by Paul Tudor Jones, locked the $10 billion BVI Global fund last week ahead of plans to split the fund into two.

“There’s no longer the stigma associated with putting up gates or suspending redemptions as it was before this crisis,” said Jaeson Dubrovay, head of the $19 billion hedge-fund group at consulting firm NEPC LLC in Cambridge, Massachusetts. “It’s actually being encouraged by some large institutions as a way to protect longer-term investors from those who panic and redeem.”

Darcy Bradbury, a spokeswoman for D.E. Shaw, and Steve Bruce, a Farallon spokesman, declined to comment.

Industry assets peaked at $1.9 trillion in June, data compiled by Chicago-based Hedge Fund Research Inc. show. Investment losses and withdrawals may shrink that amount by 45 percent by the end of this month, according to estimates by analysts at Morgan Stanley.

Outperforming Peers

The gate on D.E. Shaw’s Oculus fund was triggered after the company received redemption requests for more than 8 percent of assets, said the people, who asked not to be identified because the information is private. The fund, which tries to profit from global economic trends, is up about 10 percent this year, compared with the average 16.4 percent decline for the industry through October, Hedge Fund Research reported.

Investors asked to redeem more than 6 percent of D.E. Shaw’s Composite fund, which pursues multiple investment strategies and has lost 4 percent.

Even hedge funds that are outperforming peers have been hit by redemptions because they are a more ready source for cash for investors. Shaw, 57, started his firm in 1988 and has 1,600 employees worldwide.

First Losing Year

Farallon, founded by Thomas Steyer, told investors in a letter that Farallon Capital Institutional Partners LP plans to resume redemptions as early as January. Meanwhile, they won’t be charged management or incentive fees. They will pay expenses such as legal and accounting fees, according to the letter, which was posted yesterday on the Web site dealbreaker.com.

The Farallon fund fell 23.8 percent through October, and is headed for the first annual loss in its 22-year history. Steyer, 51, invests in assets from stocks to distressed debt and real estate. His main fund climbed at an average annual rate of 14.6 percent for the past 22 years, compared with about 9 percent for the Standard & Poor’s 500 Index.

Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets, bet on falling as well as rising asset prices and participate substantially in profits from money invested.

To contact the reporters on this story: Saijel Kishan in New York at skishan@bloomberg.net; Katherine Burton in New York at kburton@bloomberg.net
Last Updated: December 3, 2008 22:14 EST

But wait! There's more!

From The Times
December 4, 2008
Fortress suspends redemptions as investors seek to pull $3.5 billion
Miles Costello

Fortress, the New York-listed hedge fund, became the latest victim of the market crunch last night as it suspended redemptions on four of its flagship Drawbridge funds after investors moved to pull $3.5 billion (£2.4 billion) – almost half the funds’ assets.

Shares in Fortress, one of the few listed hedge funds, lost more than 25 per cent as it said that redemptions meant the assets managed by the four funds would fall to $3.65 billion by January.

Wes Edens, Fortress’s co-founder and chief executive, has already told shareholders that investors were preparing to redeem capital as they seek safer-haven assets to escape the hedge fund rout. Despite this, yesterday’s alert sent shares as low as $1.71 in early trading before they closed at $1.87.

At the end of September, Fortress was one of the world’s biggest hedge fund managers, with assets under management of $34.3 billion. Its latest decision underscores how wide-reaching the hit on the industry has become. Fortress said that its move was temporary but gave no date for unfreezing the funds.

Fortress has “evaluated the most appropriate course of action to take in response to the requested redemptions . . . and [has] acted unanimously to temporarily suspend pending redemptions from the fund”, the group said in a filing to the Securities and Exchange Commission, the American regulator.

Fortress offers its investors monthly opportunities to withdraw their assets. It said that the $3.5 billion related to November and this month, adding that it had already briefed investors about $1.5 billion of the $3.5 billion.

Hedge funds are suffering their worst performance for ten years and worldwide the industry is on course for an annual loss, only its second ever. Sliding bond and equity markets and panic-stricken reactions by investors have combined to reduce hedge funds’ total assets under management to about $1.5 trillion, compared with $2 trillion at its peak, according to estimates from Hedge Fund Research, the Chicago research firm.

Funds have been rushing to shut the door on investors, as well as restructuring their investment vehicles and cutting management and performance fees in order to bolster their businesses.

Paul Tudor Jones, one of the best-known hedge fund managers, last week suspended redemptions on his Tudor Investments’ $10 billion BVI Global fund while he and his team moved to restructure the underperforming parts of the fund. Tudor had faced $1.4 billion in redemption calls in recent weeks, Mr Jones wrote in a letter to investors.

Fortress said that the redemption freeze applied to four Drawbridge Global Macro funds, which place big directional bets on macroeconomic events such as interest rates and long-term currency convergences.

Suspending redemptions was once a sign that a fund was about to fail, but it is now a much more accepted tool to safeguard capital, for a while at least. The hedge fund industry shrank by 9 per cent in October when investors withdrew a record $40 billion.

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Another hedge fund freezes redemptions

Do you trust your money in the hands of others? This is another type of bank run. Consider liquidating and buying gold & silver:

Tudor Jones suspends withdrawals from flagship fund

By James Mackintosh
Financial Times

Published: December 1 2008 11:40 | Last updated: December 1 2008 11:40

Paul Tudor Jones, who shot to fame and made a fortune when he predicted the 1987 stock market crash, has suspended withdrawals from his $10bn flagship hedge fund and plans to split out toxic assets into a new fund with lower fees.

Greenwich, Connecticut-based Mr Jones, in a letter sent to clients on Friday, said investors wanted back 14 per cent of their money at the end of the year. This would have left the remaining investors holding too large a proportion of illiquid assets, particularly corporate credit in emerging markets, the letter said.

The suspension is further evidence that even successful hedge funds are being hurt by the rush for cash among investors, as the Tudor BVI fund is down only 5 per cent to the end of November, far ahead of the industry.

Some in the industry fear the suspension could lead to further withdrawals from successful funds as investors search for cash elsewhere, prompting more trouble for hedge funds.

“I recognise that a restructuring is an unwelcome, but I believe necessary, step against the backdrop of Tudor BVI’s 22-year history of unbroken profitable years,” Mr Tudor Jones wrote. “I believe it is but a brief step, however, on the road to important long-term changes for the benefit of all investors.”

Tudor is already in the process of splitting out the Raptor fund, run by James Pallotta from Boston, which has been hit by heavy withdrawals. Raptor was down 16 per cent to the end of October, according to one investor.

Illiquid assets will be split from the BVI fund into a new Legacy fund, holding corporate credits in Eastern Europe, Asia and Latin America, private equity and hedge fund investments. About $3.1bn of the fund’s assets are currently in emerging market credit – 62 per cent of it in upper-tier banks – but assets are short-dated and rolling off quickly, the letter said.

Mr Tudor Jones said withdrawals were likely to be allowed again at the end of March next year, after toxic assets have been split from the main, liquid, fund. The main fund will return to Mr Tudor Jones’ trading roots in highly liquid global macro positions, a strategy he dubbed “back to the future”.

Freewheeling macro traders, who bet on interest rates, leading stock market indices, commodities and currencies, have mostly avoided this year’s market disaster. Systematic, or computer-driven, macro traders are doing particularly well, with the Keynes fund run by Sushil Wadhwani, a former member of the Bank of England’s monetary policy committee and an ex-Tudor manager, up 34.4 per cent to the end of October.

Copyright The Financial Times Limited 2008

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More Hedge Funds Halting Redemptions

Another reason to own physical gold & silver in these uncertain times:

Baltic, London Hedge Funds Halt Redemptions
November 5, 2008
(source)

The rash of hedge funds halting redemptions continues as global markets spiral down with two more freezing their assets.

GILD Arbitrage, the first registered Baltic hedge fund, will halt redemptions and subscriptions until May 5, citing “market turbulence.'”

The fund, managed by the Tallinn, Estonia-based investment bank GILD Bankers, took the step because of “the risk of treating some investors unfairly” and because it didn't want “to act too hastily in realizing the potential of our fund investments,” Bloomberg News reports, citing Tonno Vaehk, who oversees the fund, in an e- mailed statement.

The fund, which focuses on arbitrage, has 300 investors and total assets of about US$127 million.

Elsewhere, Autonomy Capital Research, a US$1.7 billion hedge fund run by former Lehman Brothers Holdings trader Robert Gibbins, halted withdrawals from its flagship global macro fund after losses this year.

The US$1.2 billion Autonomy Capital Fund dropped 40% this year through October, according to a Nov. 3 letter sent to investors. “Redemptions at this time could be materially adverse to the best interests of the fund,” wrote Gibbins.

Most of the pending redemption requests will be paid in the second quarter of 2009, Autonomy said. The firm will present a restructuring plan in the coming weeks.

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