The Australian – HFA, which has $5.8 billion in assets, joins a long line of fund managers — including Perpetual, Babcock & Brown and Macquarie Group — in suspending redemptions from some funds this year as the credit crisis takes its toll on the value of fund assets.

Standard & Poor’s has placed 80 to 90 per cent of all the mortgage funds, property funds and fund of hedge funds it rates "on hold" this year due to changes in the redemption process.

HFA shares plummeted 55 per cent to 4.3c in local trade yesterday, taking the year’s decline to 98 per cent, after the company said it had stopped allowing withdrawals from the HFA Diversified Investments Fund, the HFA Octane Fund and the HFA Octane Fund Series 2 because of "deteriorating liquidity in underlying investments".

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