BOSTON Aug 14 Hedge fund Turnberry Capital
Management LP, which specializes in distressed debt, is telling
investors that it plans to shut down and return their money
after many asked for it back.
"We intend to take a series of steps to liquidate the Fund
and redeem all Fund investors at the same pace," fund manager
Jeff Dobbs wrote to his clients last week, telling them that
most of his clients have said they want out of his portfolio.
Approximately 70 percent of the credit derivative book has
already been liquidated, Dobbs said.
"After Labor Day, we will commence a sell-down of the
Fund's security holdings in order to raise cash to fund
redemptions," he added.
The letter was obtained by Reuters.
Calls to Turnberry for comment were not returned.
Roughly a year ago the fund managed about $800 million,
people familiar with the fund said.
On its website, Turnberry said its strength lies in
identifying companies that are suffering liquidity problems,
but have the assets, cash flows and motivated managements that
allow them to execute transactions (renegotiation of debt,
securities exchanges, asset sales or equity infusions) to solve
In the letter, Dobbs thanked his clients for the
opportunity to invest their money, promised to keep them
informed on how he will wind down the fund and even offered
them a chance to let him manage more of their money.
"Going forward, I plan to own a corporate bond portfolio,"
he wrote, adding that if people are interested in sticking by
him, "investment details of what I plan to own will be
transmitted to you upon your request."
Turnberry is not alone in facing heavy redemptions,
industry analysts in the $2 trillion hedge fund industry said,
noting that poor returns this year have prompted many investors
to ask for their money back sooner rather than later.
Unlike mutual funds, however, hedge funds traditionally
lock up their investors' money for months or even years and
require lengthy notices from clients who want to exit.
These notices began to pour in earlier this year at
hundreds of funds, industry lawyers and investment advisers
said, noting that many hedge fund investors put in their
requests by June 30.
(Reporting by Svea Herbst-Bayliss and Dane Hamilton; Editing
by Brian Moss)