16/06/2010 Author: Elana Margulies

Ramius to liquidate two multi-strategy offerings

Cowen Group, the investment banking firm that merged with alternatives fund manager Ramius in November last year, will liquidate its two multi-strategy hedge funds, the Ramius Multi-Strategy and Ramius Enterprise funds, due to ongoing and future redemptions in the two funds.

Redemptions in the multi-strategy fund had triggered rights held by major investor Unicredit and its affiliates, which would have allowed the Italian banking conglomerate to withdraw all its assets with only 30 days’ notice. In total, Unicredit will redeem $668m from a variety of Ramius funds but has offered to extend the time period that Ramius has to return the bulk of its funds to the end of the year.  

Investors in the funds will be offered redemption options with regards to the liquid portion of their investments since some, but not all, have asked for their money back. More than 50% of the assets managed by the Ramius Enterprise fund are held by the company itself and will continue to trade.

As of 1 April, assets under management across all Ramius’s funds totaled $7.87bn, which included 67 smaller funds and managed accounts, as well as the Cowen Healthcare Royalty Partners fund and seven funds each with assets under management in excess of $200m. Hedge fund assets under management totaled $1.7bn, while fund of hedge funds (FoHF) assets under management totaled $1.8bn.

A filing from the US Securities and Exchange Commission (SEC) revealed that Ramius will return money to investors in the Ramius Multi-Strategy fund on a monthly basis beginning 30 July. It is expected to complete the entire liquidation of the portfolio's liquid assets by 31 December. According to BarclayHedge data, the Ramius Multi-Strategy fund was up 3.08% YTD through April. Last year it was up 8.51%.

In addition to the flagship offering winding down its assets, the SEC's filing stated that Ramius was looking for buyers for assets in some of its segregated portfolios owned by Lehman Brothers, including convertible arbitrage, credit opportunities and multi-strategy offerings.

Ramius, a once high-profile alternative investment manager started by former Lehman Brothers veteran Peter Cohen, has undergone a number of transitions during the past couple of years. Early last year, HFMWeek reported that Ramius's Fund of Funds Group liquidated some of its offerings including the Ramius Opportunity Equity Fund of Funds and the Ramius Fixed Income Arbitrage Fund of Funds. Only a few months before that, Ramius told investors it would shut four of its hedge funds totaling $550m safter they failed to reach critical mass.

Ever since the merger between Ramius and Cowen, the two firms have been evaluating how to integrate the businesses. As part of this process, Ramius decided to close certain funds with limited growth potential and create more liquid options for investors. In March, Cowen Group created Ramius Trading Strategies and launched the RTS Global Fund, a multi-manager fund focused on active trading strategies including managed futures and global macro, through RTS's managed account platform.