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Michael Pearson From Kirsten Bischoff, Opalesque New York:

Harcourt Investment's fund of hedge funds Belmont Asset Based Lending Ltd was meant to give investors exposure to a wide variety of asset based lending strategies. This included real estate, fixed assets, accounts receivable, inventory financing, trade and commodity financing, insurance related products, PIPEs and others. Launched in 2006 it was targeted to return Libor +300-500bps (net of fees) with low volatility. (Source

Although the asset based lending strategy grew (in 2008 ABL funds had grown to $15.6bn in assets, up from less than $1bn in 2004, according to HedgeFund.net), it is an illiquid strategy, which caused many ABL funds problems during the liquidity crisis that marked the beginning of the financial crisis. On top of investors needing to redeem funds, the strategy took an additional hit when a number of hedge funds were caught up in the Petters fraud and leverage providers became nervous.

Many funds that went into distress during this period continue to go through restructuring, even as the strategy itself performed well in 2010 (HFRI RV: Fixed Income-Asset Backed Index gained +14.32%), and funds such as Belmont, which was tied up in legal issues during 2010 after being forced into liquidation, are becoming available on the secondary market.

"What has been happening in 201......................

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