United Capital Asset Management today clarified its decision to temporarily suspend redemptions for several of its hedge funds. Specifically, the company said that the Horizon Fund, Horizon ABS Fund L.P., Horizon ABS Fund Ltd. and Horizon ABS Master Fund Ltd. would not be liquidated and that the parent, UCAM, would continue to operate.
Over the past 10 days, UCAM has received an unusually high number of redemption requests, including one from its largest investor who accounts for approximately one-quarter of the UCM 's assets under management. The investor was not identified.
The company stressed in an effort to address the recent market turmoil, it has reduced many cash bond and all synthetic positions in June. UCAM also lowered Horizon's leverage and sold a large, unspecified amount of cash securities into the market without using bid lists or auctions. The firm also closed down its position in the ABX, which resulted in a loss for the company.
"We view the synthetic markets as highly volatile and, at this time, have stopped trading them entirely," the company said.
The Horizon group of funds had more than $145 million of cash as cushion against current lending requirements as of July 3, 2007. The firm expects to be down for the month of June as well as for the year, as a result of trading losses and market repricing.