Globe and Mail – Goodwood Inc., a value-oriented manager, briefed investors Thursday on a dismal September. There’s a lot of these letters going out from hedge fund managers. Goodwood’s funds were down 16 per cent last month, bringing the year-to-date loss to 32 per cent. Year-to-date, the S&P/TSX benchmark is down 13 per cent.

Goodwood executives Peter Puccetti and Cam MacDonald used their September letter to unitholders to explain the madness of markets, and plead for patience and perspective. They certainly deserve a hearing. But investors who bought into hedge funds on the basis of absolute returns – making money in good markets and bad – are going to struggle with these pleas.

“We have seen many well-known investment management operations badly harmed as a result of their leverage exacerbating the effects of the ongoing credit crunch and deleveraging we are currently living through,” said Goodwood’s team.

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Fortis has closed three small hedge funds in the aftermath of its acquisition of part of ABN Amro and merger of the Belgian and Dutch banks’ asset management operations, according to a report in the Financial Times.

The Fortis European long/short fund, which had €120m ($167m) under administration, was shut after the decision to rope in the ABN European equity team, led by Andrew King.

The convertible arbitrage fund was shut in order to free up staff to focus on the enlarged long-only convertible bond funds. The final fund, a US long/short fund, was shut at the end of last year, the FT report said.

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