BlueBay Asset Management plans to shut a $1.2bn hedge fund after it lost a third of its value in three weeks and its portfolio manager resigned after valuation guidelines were breached, the London-based company said on Thursday.
The closure of the fund comes amid a wave of similar moves, which in recent months have included the closure of the flagship funds of Londonā??s MKM Longboat, Powe Capital and Millennium Global, a fund from Artemis, a dozen of RAB Capitalā??s funds and two debt funds from Highland Capital Management, among others.
The BlueBay Emerging Markets Total Return fund was down 53 per cent for the year to the end of last week, with most of the loss this month as credit default swaps supposed to hedge against bond positions failed to protect it from losses.
The closure will leave BlueBay with just two hedge funds, Value Recovery, which cut fees in the summer, when it managed $2.6bn, in return for a lock-up until next year, and the Multi-Strategy fund, which managed $1.7bn at the end of June. A small fourth fund was shut in the summer.
BlueBay managed $5.4bn in hedge funds and $15.1bn in long-only funds at the end of September.
The company said on Thursday that the breach of valuation guidelines, which led to the resignation of Simon Treacher as manager of the fund, was not related to the losses or the decision to close.
