Hedge Fund Implosion: Wall Street Blamed
Curse of the best.
Peloton’s ABS fund, was named best new fixed-income hedge fund by EuroHedge magazine only last month.
“Credit providers have been severely tightening terms without regard to the creditworthiness or track record of individual firms, which has compounded our difficulties and made it impossible to meet margin calls,” Peloton co-founders Ron Beller and Geoff Grant said in a letter to clients.
Peloton Blames Wall Street Lending Crackdown for Fund Collapse
One of London’s most successful hedge funds imploded Thursday when Peloton Partners put the assets of its $2bn flagship fund up for sale and froze its remaining fund after geared mortgage bets left it unable to meet lenders’ demands.
Rumours of the crisis at Peloton’s ABS fund, helped drive the high-quality mortgages in which it was invested to all-time lows this week as traders prepared for $9bn of assets to be dumped.
The losses are particularly striking because Peloton ABS was one of the big winners from the US subprime crisis, gaining 87 per cent last year after betting against low-quality mortgages.
Peloton Partners in $2bn assets sale
ABX sinks Peloton ( or maybe Peloton sinks ABX )
Peloton fund sets winning pace