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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Tags: absolute-return, asset class, backers, baddest, bible, bond fund, bond-market, canadian finance, convertible bond, convertible funds, converts, globe and mail, market-meltdown, wheels, workout

Gold Seek – This January was one of the worst on record for financial markets. US Treasuries crashed after enjoying a recession-beating run in 2008. Gold and silver were the only major asset class to end the month higher.

Hedge funds that previously ignored precious metals have become converts, with hedge fund star Greenlight Capital buying the yellow metal for the first time.

Another money manager Osmium Capital Management is offering a hedge fund priced in ounces of gold to protect it from exchange rate fluctuations. Subscriptions are in dollars, euros or pounds and then converted into gold.

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Tags: asset class, capital-management, converts, exchange rate fluctuations, financial-markets, gold-and-silver, greenlight capital, money manager, osmium capital, precious-metals, recession, subscriptions, treasuries