H edge fund Beacon Hill Asset Management has been replaced by Ellington Management for all its outstanding vehicles, following the realization that Beacon lost roughly half its asset value late last year, according to reports. While there were several reports that the fund, and its three CDOs, were on the proverbial "last leg," Ellington's arrival has inspired some confidence in market participants.
"Despite the problems at Beacon, [senior portfolio manager] John Dunlevy was not the problem, the hedge fund was blowing up around him," an investor said. "I think Ellington is a very competent CDO asset manager." Ellington's CDO arm ironically named Duke Funding has issued four CDOs to date, the latest pricing last November via Credit Suisse First Boston.
As of press time there had been no ratings action taken on any of the three outstanding CDOs issued by Beacon Hill. Beacon's most recent transaction priced July 24 via Banc of America Securities.
The two aforementioned banks are currently embroiled in a lawsuit to force a change in management of the hedge funds run by Beacon Hill, and sources at both banks declined comment.