West Palm Beach (HedgeCo.Net) – Pardus Capital Management has halted redemptions from their activist hedge fund, locking up over $2 billion of investors capital.
Hoping to reduce any anxiety associated with selling the shares prematurely, the move was made in order to “protect the funds and their investors from external short-term pressure.”
Pardus takes large positions in companies and pushes for strategic changes. They have stake in Delta Airlines and United, and have been pushing for the two companies to merge. They also invest in automotive companies like General Motors and Delphi, both of which have experienced falling stock prices.
"Because our investment portfolio has always consisted of a small number of high-conviction, capital-structure agnostic corporate positions in which we have taken a long-term investment perspective, the funds have been disproportionately affected by recent market volatility," a spokesman for Pardus said.
It is not uncommon for hedge funds to suspend investor withdraws should they experience sharp losses or unfavorable market conditions. In December, Drake Management halted redemptions on their $3 billion Global Opportunities Fund before the ensuing debate on whether or not to shut the fund down.
Julie Scuderi
Senior Editor for HedgeCo.Net
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