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By the Opalesque Team: Swiss private bank Reichmuth is shutting down its Matterhorn FoHFs, reported Swiss news site Cash.ch yesterday. The managers wanted to use side pockets, which would have been more advantageous to its investors, but Finma did not approve.
According to Reichmuth CEO Ricardo Cordero, the regulator Finma disapproved of a side-pocket solution 'without explaining the reasons' for the decision, although Reichmuth & Co had provided Finma with detailed material on the fund.
"The side pocket solution definitely would have been better for our investors", Cordero said. Investors who wanted to withdraw their money would have had immediate access to the liquid part of the portfolio, which is approximately 75% of the fund's assets. Instead, all investors will receive about 50% of assets in April-09. The remaining money is not expected to be paid back until the end of 2010.
When asked for the reasons for the fund's liquidation, Cordero referred to gates and suspensions of underlying hedge funds, as well as accelerating client redemptions caused by the financial crisis and the Madoff scandal.
In December, the bank told clients that the Matterhorn fund had invested 3.5% of its assets in Madoff, which resulted in a loss of about CFH400m (US$340m) (related exclusive).
In early Janua...................... To view our full article Click here
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