We’d ask you to forgive us for not getting this up sooner but we’re working under the assumption that you received our memo stating that in the absence of posts reporting hedge funds getting nailed by “current market volatility,” you’re to hallucinate posts reporting hedge funds getting nailed by “current market volatility,” because most of them are (plus: you all have Bloomberg accounts). Solent Capital said today that it will be winding down its “Mainsail II” fund because of a downturn in value in the asset-backed securities it holds.
The fund was invested in commercial mortgage-backed, residential mortgage-backed securities, and collateralized debt obligations. These securities did not do so well in the wake of no one in the United States making their (subprime) mortgage payments (and downgrades by credit-ratings agencies). Mainsail II, underwritten by Barclays Capital, was part of a “special” asset class known as “SIV-Lite,” meaning light on credit line back-up and heavy on “this will end badly.” A spokesman for the fund also attributed the run of bad luck to karma for being by named by some preppy asshole who gets off on sailing jargon and would tear you a new one for not knowing the difference between the Fore-mast and the Jigger-mast.
Solent Capital to wind down fund [MarketWatch]