Fortress Investment Group, the listed private equity and hedge fund group, has suspended redemptions at its flagship Drawbridge Global Macro Fund after investors sought to withdraw more than $3.5bn in funds, according to a regulatory filing Wednesday.Fortress shares closed down 25 per cent at $1.87 in New York. It has lost about 88 per cent of its value this year and now has a market cap of about $773m. In its SEC filing, Fortress estimated that the Drawbridge fund would have assets of $3.65bn by Jan 1. Through the end of October, the Drawbridge fund has lost 19.97 per cent of its value.
Bloomberg also reports that D.E. Shaw & Co. LP, the investment firm run by David Shaw, and Farallon Capital Management LLC limited withdrawals by clients, joining more than 80 hedge-fund managers to impose restrictions in the past two months.
D.E. Shaw, which manages $36bn, capped redemptions from its Composite and Oculus funds, according to people familiar with the company. Farallon, a $30bn firm based in San Francisco, did the same with its biggest fund after investors asked to get back more than 25 per cent of their money.
D.E. Shawâ??s Oculus fund blocked withdrawals after the company received redemption requests for more than 8 per cent of assets. The fund is up about 10 per cent this year, compared with the average 13.2 per cent decline for hedge funds through October.
This shows that even hedge funds that have positive results and outperform their peers are not immune to investors' desire to raise cash.
Farallon, founded by Thomas Steyer, told investors in a letter that Farallon Capital Institutional Partners LP plans to resume redemptions as early as January. Meanwhile, they wonâ??t be charged management or incentive fees. They will pay expenses such as legal and accounting fees, according to a letter to investors.
The Farallon fund fell 23.8 per cent through October, and is headed for the first annual loss in its 22-year history.
