Ospraie fund to close after August hit
Hedge fund manager Ospraie Management LLC will close its flagship fund after it plunged 27 percent in August on losses in energy, mining and natural resources equity holdings, in one of the biggest ever closures of a commodities-focused hedge fund.
The closure of the fund, announced by the firm’s founder Dwight Anderson in a letter to investors on Tuesday, could be more bad news for Lehman Brothers Holdings Inc, which took a 20 percent stake in the hedge fund manager in 2005.
One expert said the closure of the fund, which at the time of the letter’s writing had lost 38.59 percent this year, may also have played a role in bringing down U.S. stocks on Tuesday, which fell after initially climbing more than 1 percent. Lehman shares were down more than 3 percent in after-hours trading.
“This is just adding to the fire for commodity-related names,” said Peter Holst, managing director at Delta Global Advisors in Southern California. “Even this morning when the market opened, some of the names that Ospraie has positions in were getting hammered.”
Ospraie and Lehman declined to comment.
As of the beginning of August, the flagship fund, Ospraie Fund Ltd, had $2.8 billion invested, a person familiar with the situation said.
Ospraie Management still manages $4 billion in other investment funds, including a special opportunities fund, the source said faxless payday loans. That fund bought the commodity trading and merchandising operations of ConAgra Foods Inc earlier this year.
In the letter, Ospraie Management said it planned to distribute 40 percent of Ospraie Fund’s assets to investors by September 30 and an additional 40 percent by the year-end. The remaining 20 percent of the fund’s assets are mostly illiquid and could take up to three years to give back to investors, it said.
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