Synapse Investment Management kicked the week of right by closing Synapse High Grade ABS, one of its three fixed-income funds. Though it emphasized that SHG ABS had “no [direct] exposure’’ whatsoever to subprime, its main investor, Landesbank Sachsen Girozentrale, did have some issues with suboptimal mortgages, and spread the misery around by yanking its investment and forcing Synapse’s hand. (The German bank was recently bailed out by several of its state-owned bank friends for €17.3 billion (US$23.6 billion)).
Synapse blamed “severe illiquidity in the market” for the closure of the fund, which had only been operating since April. Rob Ford, who managed the firm’s asset-backed securities, noted “disappoint[ment]” around the water cooler. Co-founder Mark Holman focused more on vindictiveness, which is great for make money, telling Bloomberg: “There are enormous opportunities in the ABS market caused by this enormous deleveraging and we intend to return with a fund that can exploit them.” Lead the way.

Synapse Shuts Fund Because of Market `Illiquidity' [Bloomberg]