Ellington Capital has told its investors that it’s halted redemptions and withdrawals in two funds due to liquidity problems caused by the mortgage market meltdown.
The fund’s redemption suspension covered
two mortgage-credit funds with about $1.9 billion in assets between them,
according to the investor letter from Michael Vranos, the fund’s general
partner.According to the letter, which was obtained
by The Post, Ellington’s move came after liquidity and value data provided by
Wall Street’s mortgage-bond desks at the end of September for the bonds in the
portfolios varied so widely that Vranos and his colleagues could not assign a
fair value to them.The letter emphasizes that the redemption
suspension was not a function of losses or investor withdrawals. The two funds,
according to the letter, have a minimal amount of withdrawal requests and any
that came in easily could have been handled out of available cash.
The Freeze is on At Giant Mortgage Hedge Fund - New York Post
Tags: Credit Crunch, Hedge funds
