Globe and Mail – On monday, when North American markets cratered, was not the most auspicious day to launch a closed-end fund of hedge funds, but Star Hedge Managers Corp. has been quietly trading since then.

This fund invests in the hedge funds or portfolios run by Eric Sprott of Sprott Asset Management Inc., Rohit Sehgal of Dynamic Mutual Funds Ltd. and Normand Lamarche of Front Street Capital.

Star Hedge Managers, which closed down 39 cents yesterday at $9.35 on the Toronto Stock Exchange, raised $75-million through an initial public offering of $10 a unit. It had targeted raising $500-million.

"I’m surprised" that it did raise $75-million given the tough market environment, said Phil Schmitt, chairman of the Canadian unit of the Alternative Investment Management Association. "There’s still a market for quality managers."

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Reuters- The credit crisis is not over, and losses in the financial sector are set to be around $1.3 trillion, according to star hedge fund manager John Paulson, who says he remains short credit.

In its twice-yearly report in April, the International Monetary Fund had said total potential losses on both subprime and other loans as a result of the credit crisis could reach $945 billion. Paulson, who earned $3.7 billion in 2007 according to Alpha Magazine by going short the subprime sector during the U.S. mortgage meltdown, also said a deterioration in consumer spending was set to drive the U.S. economy into recession this year.

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