Globe and Mail – The market meltdown has claimed another hedge fund, with Silvercreek Management into workout mode on a convertible bond fund that featured a who’s who of Canadian finance backers.

Silvercreek oversees an estimated $300-million, and ran into trouble in November when the wheels came off the convertible bond market. This debt, which can be flipped into equity, constituted the single worst performing asset class for hedge funds in 2008. That makes converts, as they are known on the Street, the baddest of a very bad lot.

Convertible funds were down an average of 26 per cent last year, according to the U.S. bible for the industry, Absolute Return. The average performance was a loss of just 6.9 per cent.

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