Bloomberg- Pirate Capital LLC, the hedge-fund manager run by Thomas Hudson, barred withdrawals from its two Jolly Roger Activist funds after the firm’s assets declined by almost 80 percent in thepast year.
Pirate designated the four stocks held by the funds as “special investments,” meaning that clients won’t be able to get money back until they are sold, according to an Aug. 31 letter to investors.
“In view of the activist nature of the funds, prior redemptions, market turmoil and their effect on the funds’ individual positions and portfolios as a whole, we determined that the best way to manage the positions is through the Special Investment designation,” Hudson said in the letter, a copy of which was obtained by Bloomberg News. Pirate may also lift the designation without selling the stocks.
Hudson, 41, is known for acquiring stakes in companies and pushing management to make changes to boost their stock prices. The five-year-old firm’s assets fell to $375 million as of Sept. 1 from $1.8 billion a year earlier.
The activist funds, which opened in January 2006, had $150 million in assets as of March 2006, according to a Pirate marketing document. They now oversee about $100 million. The funds lost about 1 percent for the year through June 30, according to a newsletter sent to investors.
