| NEW YORK
NEW YORK Nov 25 FX Concepts, once the largest
currency hedge fund in the world, has less than $2 million in
assets now and $79 million in liabilities, according to the
latest court filings on Monday.
The fund filed for bankruptcy protection more than a month
ago as its assets dwindled due to market losses and redemptions
from major clients.
At its peak in 2007, the $14 billion that FX Concepts had in
assets under management made it the largest currency hedge fund
in the world.
The latest court filings showed FX Concepts has $1.62
million in assets and about $79.2 million in liabilities. The
biggest part of those assets is a $1.61 million loan note from
FX Concepts Chairman and Chief Investment Officer John Taylor.
The filings on Monday also stated FX Concepts' income for
the past three years were $173,651.68 in 2011, $1.13 million in
2012, and $35,785.47 from January to September 30, 2013.
The fund's biggest debt is a $34 million unsecured note to
Asset Management Finance (AMF), which is majority-owned by
Credit Suisse and provides flexible capital to
Court documents showed that AMF provided $40 million in
financing to FX Concepts in 2006 and 2010 through two
revenue-sharing agreements. In December 2012, as returns
dwindled in the FX market, Taylor renegotiated the financing
package. AMF then agreed to defer eight quarterly
revenue-sharing payments and in return Taylor personally
guaranteed those obligations.
At the beginning of the year, the company paid $749,309 to
company insiders, described as "shareholder distribution."
The biggest payment was made to Taylor and his trust,
totalling $376,433. Taylor and his trust own roughly 41 percent
of the company.
FX Concepts suffered from poor returns due to the weak
performance of its systematic trading business. About 90 percent
of the fund's trading is done through the systematic approach,
which involves the use of computer models in trading.
This approach has not worked in 2013. As returns dwindled,
investors withdrew. The final blow came in early September when
the San Francisco Employee Retirement System gave notice that it
was redeeming its investment in full. That investment accounted
for 66 percent of FX Concepts' total assets under management at
(Editing by Kenneth Barry)