Corporate & Securities Law

According to top industry executives, there will be more hedge fund collapses this year as many managers struggle to borrow the money they need to trade with and face investors disappointed by recent losses.

"Some funds simply will not do well, particularly those specializing in fixed income markets," said David Bailin, who heads Bank of America's alternative investment group which invests in roughly 100 hedge funds.  "It will be rough trading for the rest of the year."

As a group, hedge funds recorded their worst-ever quarter in the first three months of 2008, and managers overseeing some $3.9 billion in assets have already shut down their businesses, according to data from trade magazine Absolute Return.  Peloton Partners and the Sailfish Multistrategy Fixed Income Fund rank among the year's biggest casualties so far.

Previously, the growing list of hedge funds hurt by withdrawals includes Tisbury Capital, a $2 billion London event fund; New York-based global macro trader Drake Capital; as well as Polygon, an $8 billion multi-strategy and event fund based in London as well.

Source:  Reuters; Financial Times