http://www.nypost.com/business/59126.htmDecember 20, 2005 -- Centrix Capital Management, a $700 million Colorado-based hedge fund, is limiting customer withdrawals from its main portfolio.
Centrix took the unusual step to keep institutional investors from fleeing the fund after it was hit with hundreds of millions of dollars in client redemptions.
Ordinarily, hedge funds just sell positions to raise money to pay their clients back. Centrix, however, packages sub-prime auto loans for its investors. Because those loans are private and held to maturity, there's no market in which to trade them to more willing buyers.
Centrix has gone from about $700 million in assets to $442 million, according to Hedgefund.net.
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He described the sudden rush for the doors as "a result of two of our larger investors needing to raise cash at once, for their own reasons." :eyes:
Yea, right!snip>
One potential investor in Centrix said he was scared away from the fund because it hadn't posted its October or November performance numbers yet.
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