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Alternative Market Briefing

In Australia, 8 FoHFs hurt by cash woes, put on hold by S&P, some suspend redemptions

Friday, November 28, 2008

According to Sydney-based Hatfield Liptak Advisors’ November newsletter, eight fund of hedge fund products have been hit by liquidity concerns due to a quadruple whammy of increased redemptions; decreased investor inflows; reduced or nil income from investment performances; and higher cash collateral required for currency hedging.

The funds hurt include two Select Gottex Market Neutral Funds, three Goldman Sachs JBWere multi-strategy funds, two HFA Diversified Investments Funds and the AMP Capital Total Return Fund. All eight fund products have been placed ‘On Hold’ by funds rating agency S&P.

S&P Fund Services analyst Simon Scott points out that due to the credit crunch, many managers now also face a reduced ability to draw on previously established credit facilities.

To manage their cash reserves, the Select Gottex and GSJBWere funds have temporarily suspended redemptions, while the AMP and HFA funds have altered their currency hedging policies to free up cash collateral. Website: Source

Related article: Australia`s S&P/ASX 200 index posts biggest weekly gain since 1992, HFA soars 75% From Bloomberg.com Australia’s S&P/ASX 200 Index surged 9.5 percent in the past five days, its biggest weekly gain in the benchmark’s history dating back to 1992…

HFA Holdings Ltd. (HFA AU), an Australian Hedge fund manager, soared 6 cents, or 75 percent, to 14 cents, a record ......................

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