Y2K Finance Inc., the flagship hedge fund of Wharton Asset Management, has announced that it will halt redemptions until at least December 2007. The fund, which is based in the British Virgin Islands and managed from Bermudas, said in its statement that it stops calculating net asset value because of credit market turbulence.
Wharton Asset Management, based in London, specialises in investing in asset-backed securities. The company joined at least 10 other investment managers that were forced to suspend client redemptions, to even shut down funds, since July 2007.
Wharton Asset Management was founded in 1993 by Maurice Salem who is still running the firm. The Y2K fund was established in 1999. Now the BVI fund dropped 7.31% in June 2007, a year loss made made 5.24%. Wharton’s Trio Finance Ltd. fund, which invests in real estate asset-backed securities, this year has fallen 46%.
Hedge funds are largely private and unregulated pools of capital whose managers can buy or sell any assets, participating substantially in the profits from money invested.