Peloton fund becomes latest victim of credit crisis

Added: (Fri Feb 29 2008)

Pressbox (Press Release) - London-based Peloton Partners has become the latest victim of the global credit crisis and has closed its £1 billion ABS Master Fund due to severe losses.

The fund had created an 87 per cent return in 2007 but said in a letter to investors that it was facing liquidity problems, and added that other funds were in the same position.

Peloton, founded by former Goldman Sachs partners Ron Beller and Geoff Grant in 2005, is seeking buyers for the fund's assets, it said.

A letter stated that "severe" problems stemmed from mortgage-backed debt and demands from banks to repay loans.

"The problems for the Peloton ABS Fund have had a serious negative impact on the Multi-Strategy Fund and we are currently assessing our options," the letter said.

Nigel Blanshard, a partner at London-based Culross Global Management, told Bloomberg: "The rubbish goes down first and then the good stuff is pulled down with it.

"The flight to quality this year has been to get out of mortgages altogether."

Further analysis of hedge funds could be supplied by Aranca, an end-to-end provider of on-demand, custom investment, business and economic research.

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