11/07/2008

Sandelman moves to block redemptions

Sandelman Partners, a New York hedge fund firm that manages almost $4bn, has informed investors in its largest fund that redemptions will not be on the cards in the near future, according to a report in the Wall Street Journal.

Investors representing about 20% of the Sandelman Partners Multi-Strategy Fund Ltd, which manages some $3.2bn, had asked to withdraw their money, but have been told that about 22% of the fund’s assets will be placed in a side account controlled by the firm. For the remaining 78% of total fund assets, investors will be given a choice of locking up the money for a year in a new hedge fund – to be called Sandelman Partners Opportunity fund – or having it placed in a liquidation fund, where their investment will be sold and then paid out over time.

The firm’s second, smaller hedge fund, will also be merged into the new fund.

For the first six months of the year, Sandelman's multi-strategy fund was down almost 5%. Last year, the fund lost just under 2% over the same period, but dropped sharply in the second half of the year, according to the WSJ report.

The firm is headed by Jon Sandelman who was previously a senior executive at Bank of America and before that the head of global equity derivatives job at Salomon Brothers.