New York (HedgeCo.Net) – Citigroup Inc. will be liquidating its Corporate Special Opportunities fund after losing over half its value last month, according to a report by the Financial Times.
The hedge fund had frozen redemptions for almost a year before deciding to shut it down. Many funds freeze redemptions in hopes that market conditions will improve and to prevent a liquidity crunch that may just be fueled by fear.
According to the report, Citigroup infused the hedge fund with $450 million in credit and about $320 million in equity. In its heyday, the fund managed about $4.2 billion.
October was a rough month for hedge funds as a whole, with the average fund down almost 5.5 percent according to data from Hedge Fund Research. With only two months to go, 2008 looks to be the worst year ever recorded by hedge funds, with the average fund down almost 15.5 percent.
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