Satellite Closes Hedge Funds ~ market folly

Friday, May 15, 2009

Satellite Closes Hedge Funds

The painful year of 2008 was too much for Satellite Asset Management as they are set to shut down their flagship Credit Opportunities Fund which was down around 35% during the mayhem of 2008. They will also be closing their Overseas Fund and their Satellite Fund II. Their poor performance triggered a series of investor withdrawal requests and they were forced to suspend redemptions. Apparently they could not stop the hemorrhaging, as redemption requests simply overwhelmed them. Chalk up another victory for Ms. Market, as we add another name to the hedge fund graveyard of 2008.

The interesting thing to note here is that the fund was run by three veterans of Soros Fund Management. This is an example of another fund that was spun-off/started after managers left a big global macro style hedge fund. Just yesterday, we covered how Dwight Anderson blew up his Ospraie fund after leaving Tudor Investment Corp. However, Anderson is right back to the same tricks as he has started two new hedge funds. We'll have to see if the trio of ex-Soros managers will garner new capital to start yet another fund after already failing once. Satellite was run by Mark Sonnino, Lief Rosenblatt, and Gabe Nechamkin and they managed $7 billion around its peak and over $2 billion more recently.

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